ORAL ANSWERS TO QUESTIONS

WORK AND PENSIONS

The Secretary of State was asked—

Child Poverty

Kerry McCarthy: What progress has been made towards achieving the Government's target to eradicate child poverty; and if he will make a statement.

James Purnell: Since 1998-99, 600,000 children have been lifted out of relative poverty and the number of children in absolute poverty has halved from 3.4 million to 1.7 million. Government measures over the past two years will lift about a further 500,000 children from relative poverty. On 28 January, we launched the consultation, "Ending Child Poverty: Making It Happen", ahead of a child poverty Bill that will enshrine in legislation the Government's promise to eradicate child poverty by 2020.

Kerry McCarthy: Does my right hon. Friend share my belief that children should not be written off or consigned to a life in poverty just because they happen to come from single-parent families? Will he join me in rejecting calls for preferential treatment for the children of married couples and confirm that he believes that all children should be given the best start in life regardless of their parents' circumstances?

James Purnell: I entirely agree with my hon. Friend. It is right that we should help children whatever their family backgrounds, and that means not only helping them through tax credits and reducing poverty in that way, but helping them into work, because work is the best route out of poverty.

Alistair Burt: But another report today emphasises the connection between relationship breakdown and adverse effects on youngsters. If the right hon. Gentleman means exactly what he says about ensuring an equality of outcome, can the resources that are currently spent on the consequences of breakdown be reordered, so that we do more to prevent relationships from breaking down in the first place, rather than picking up the bill for the consequences, which cost so much, not least to the children themselves?

James Purnell: Surely, we should do both. That is exactly why we are, for example, investing more in family intervention projects to help the families who are in the most difficult circumstances, while increasing the amount of money that we put into tax credits. We said in the last Budget that we would take, in total, another 500,000 children out of poverty. I do not think that the Conservative party would have pursued that policy if they had been in power.

Ann Cryer: Does my right hon. Friend agree that there are some hard to reach families—I know that there are some in my constituency—and that, sometimes, there are parents who are either addicted to hard drugs or alcohol? There are also children from families whose wider family have brought in a husband or wife, with no education, from very poor parts of Pakistan or Bangladesh. I am not sure whether there are any remedies for such very hard to reach families, but I would appreciate my right hon. Friend's comments.

James Purnell: My hon. Friend identifies a very important issue, which is exactly why we commissioned Professor Paul Gregg to consider how we can help families in those circumstances. That is why we are saying that we would require such families to find out about the support that is available and then be required, once their youngest child is three years old, to take up skills training or drug treatment to get off drugs and into work. I only wish that the Conservative party would support those measures.

Mr. Speaker: Nigel Griffiths.

Nigel Evans: Griffiths, Evans, Jones—we are all the same.
	Poverty for youngsters is often reinforced when a married couple separates by a missing parent who refuses to take their responsibility. The Child Support Agency is often deficient in chasing the missing parent. What action can the right hon. Gentleman ensure that the CSA takes to make sure that it tracks down missing parents, so that they pay for their own children?

James Purnell: In the past year, the CSA—now the Child Maintenance and Enforcement Commission—has collected an extra £156 million, but we agree that more needs to be done. That is why we are taking powers in the Welfare Reform Bill to be able to take away people's passports or driving licences without a court process. That will make things much more speedy. I hope that the hon. Gentleman will support that, unlike the Conservative party in the Lords the last time that that was proposed. That is also why we are saying that, where there is a payment, parents should be able to keep all of it and that there should be a complete disregard for child maintenance payments and benefits. We think that that could lift an extra 100,000 children out of poverty.

James Plaskitt: I welcome the publication of "Ending Child Poverty" by the child poverty unit and the road map to 2020 that it sets out. My right hon. Friend will know that, whenever we meet experts, they always raise the issue of financial exclusion and the problem that that causes in respect of child poverty. Does he agree that that will play an important role in helping us to meet that 2020 target? If so, will he consider building on the proposals that are currently in the Welfare Reform Bill?

James Purnell: Yes, my hon. Friend is absolutely right. We need to do more to support credit unions and enhance financial literacy, so that people know, for example, whether their financial arrangements are not in the best possible order. More money must be put into reducing poverty directly, thus both giving people more resources and a greater ability to earn money. If we had kept to the same policy as the Conservative party, 2 million more children would be in poverty.

Theresa May: According to a recent report by the Joseph Rowntree Foundation, 15 indicators of poverty and social exclusion had worsened in the five years preceding the onset of the current economic downturn, more than double the number in the previous five years. That includes the number of people living in very low-income households. Perhaps it is little wonder that the number of children living in poverty has risen by 100,000 in the past two years. How does the Secretary of State explain the Government's poor performance?

James Purnell: By referring the right hon. Lady to the OECD report, which stated that we had the best record among the industrialised countries for reducing child poverty and inequality.

Theresa May: Yet again, the Secretary of State is very complacent about his attitude to the issue. Another example of the Government's complacency is their refusal to end the couple penalty in the tax credit system, which would lift 300,000 children out of poverty. Why will the Government not do that?

James Purnell: The right hon. Lady has no policy of that kind, because she has no way of funding it. The Conservatives used to say that they would fund it out of welfare reform, but now they are not prepared to do as much welfare reform as us. If the right hon. Lady wants to repeat that claim, she will have to find new resources. Hers is a policy without a budget, and I hope that she will not pretend to repeat it.

Benefit Payments

Tony Lloyd: What steps his Department is taking to ensure the prompt payment of benefits to people registering as newly unemployed.

Tony McNulty: Jobcentre Plus is recruiting the additional staff needed to maintain a good service in the current economic conditions, and new jobseeker's allowance claims continue to be cleared within the agreed target of just over 10 days, on average.

Tony Lloyd: As my right hon. Friend knows, moving into unemployment is traumatic in itself for many people, but it can also be very confusing because of the interrelationship between jobseeker's allowance and other benefits. Can my right hon. Friend give the House a guarantee that the Government, and those who work for the Government, will make creating a seamless exchange for new claimants a priority, so that they do not fall foul of the consequences of either overpayment or underpayment?

Tony McNulty: My hon. Friend is entirely right. That, ultimately, is the ethos behind the merger of the Benefits Agency and the Jobcentre Plus network. I know that Jobcentre Plus staff endeavour to give everyone, at the appropriate time, all the information that they need both on establishing a JSA claim and on the ensuing benefits. The staff also work closely with local government, when that is possible, in connection with other benefits such as housing and council tax benefits.

Oliver Letwin: While we are discussing the topic of prompt payment of benefits, may I ask when the Department will be in a position to issue a statement on the payment of disability living allowance to those living in other European Union countries?

Tony McNulty: I understand that that will happen in the near future, but I will certainly get back to the right hon. Gentleman if the position is different.

Frank Field: Does the Minister accept that many of our constituents who have recently been made unemployed and who may have worked for 10, 20 or 30 years are slightly shocked that the national insurance benefit for which they paid over that period amounts to £60.50 a week, exactly the same sum that they would receive if they had not worked for a single day? What plans has he to reform and increase national insurance benefit, so that the national insurance fund, which is in surplus, helps to carry some of the burden of the recession?

Tony McNulty: My right hon. Friend is right in terms of the premise of his question, but he is not right to imply that that is all that anyone will receive in such circumstances. I will send him some worked-up examples of other benefits that apply, some—although not all—of which take account of the national insurance contribution history.
	At the risk of putting my head on the block, let me say that I think that many of my right hon. Friend's recent pronouncements about taking full account of the history of contributions are worth considering in the longer term.

Danny Alexander: As more people lose their jobs, many jobcentres will struggle to deal with the numbers coming through their doors. Will the Minister consider proposals to use other public buildings, such as council service points or libraries, to extend the reach of Jobcentre Plus, especially in communities where there may not be a jobcentre? That would particularly benefit people living in remote and rural areas such as those that I represent.

Tony McNulty: The hon. Gentleman has made a fair point. We are already doing that, but we may well need to do more given the volume of people going through the system. When I was up in Scotland fairly recently, there was much use of GPs' waiting rooms and GP focus centres. As we implement children's centres throughout the country, they will become another obvious possibility. Given that we are trying to move more and more towards a personalised service for each individual—often confidential, but sometimes involving groups—the space within which that happens will become almost a secondary consideration, but I take the hon. Gentleman's point about using the wider public estate.

John Robertson: My right hon. Friend is right about the need to get people into jobcentres as quickly as possible, but can he assure me that the training will be up to scratch? We have observed lately that some of the people in Jobcentre Plus are not up to the mark in dealing with the sensitive problems experienced by some of my constituents, and I hope that the training will become a great deal better than it is at present.

Tony McNulty: I am sorry to hear that, and if my hon. Friend has details of particular cases I would be happy to look at them. I made a rather foolish and rash promise on a recent Radio 2 show to look at each and every individual complaint, so I am happy to report that there has been a trickle of such complaints, but not the avalanche that the officials who were with me—they fell off their chairs when they heard what I said—thought that there might be. My hon. Friend is right: we have to update the training of staff in Jobcentre Plus constantly, not least for the reasons alluded to by my right hon. Friend the Member for Birkenhead (Mr. Field)—that many people presenting this time around to Jobcentre Plus will have been in gainful employment for 10, 20, 30 years or more, and this will be completely new territory for them. We are trying to get that message across to our staff.

Andrew Selous: Some of the newly unemployed are in urgent need of assistance from the social fund, so why is it that the Department can answer callers to the CSA within an average of 18 seconds, when it often takes applicants to the social fund days to get through? The Department does not even know how many calls it is losing. When will the Department make a commitment to give a decent level of service to the most vulnerable?

Tony McNulty: That is a serious point, but the hon. Gentleman should perhaps calm down. We are doing much better than we have in the past. It has been an area in which we have been lacking, but I am assured that things are improving considerably. If the hon. Gentleman has examples of that not being the case, I will happily look into them, but he will have to agree that the situation is much better than it was.

Derek Twigg: One group of people that has been contacting me recently is the self-employed who are now out of work because their businesses have gone bust. That particular group seems to be having difficulties. What are the Government doing to ensure that that group are getting some advice about what help they can get at this difficult time?

Tony McNulty: That is a fair point, and I will happily meet my hon. Friend and some of the people about whom he is concerned to lay out clearly exactly what is on offer for the self-employed. At the other end of the continuum, we are trying to say, especially with our enhanced support at six months, that self-employment may be a route out of people's current circumstances, but it is imperative that we show clearly what a self-employed individual can expect from the wider benefits system as well as from Jobcentre Plus. I will happily talk to my hon. Friend about that in more detail.

Pensioner Poverty

Bob Spink: What recent progress he has made in reducing the incidence of poverty among pensioners.

Rosie Winterton: We have made significant progress in reducing the incidence of poverty among pensioners. Through targeted support and £13 billion of extra spending, the proportion of pensioners in relative low income has fallen from 29 per cent. in 1998 to 19 per cent. in 2006-07, with 900,000 pensioners lifted out of relative poverty.

Bob Spink: I congratulate the Government on the various initiatives that they have brought forward to help hard-pressed pensioners. One of the best is of course pension credit: the problem is that many elderly people do not take it up for some reason. What will the Minister do to increase take-up to help hard-pressed pensioners by hundreds—and sometimes even a couple of thousand—pounds a year?

Rosie Winterton: The hon. Gentleman is right to say that we must be vigilant in ensuring that pensioners know about pension credit. I am happy to say that in his constituency the number of households in receipt of pension credit has increased from 2,680 in November 2003 to 4,150 in May 2008. We are continuing to make changes—for example, housing benefit, council tax benefit and pension credit can be claimed over the phone in one phone call. We are also simplifying processes and making home visits to people who want them.

David Borrow: Many pensioners rely on interest from savings to supplement their state pension. They have seen that income drop considerably as interest rates have fallen. Will my right hon. Friend look again at the way in which the amount of savings held impacts on the range of benefits that a pensioner is entitled to receive?

Rosie Winterton: As my hon. Friend knows, the Government have not had a cut-off point for savings above £6,000. The amount that people are expected to contribute from their own resources used to be based on £1 for every £250 of savings, and we have increased that amount to £500. There is now no upper limit on the amount of savings that pensioners can have before they are entitled to some help through pension credit.

Roger Gale: The Minister will be aware that there are a significant number of expatriate pensioners living in France and other European countries who are suffering considerable poverty as a result of the Government's inability to honour the European Court's findings and to pay to them the disability living allowance and other benefits to which they are entitled. When are the Government going to make a decision on that issue? [Official Report, 9 February 2009, Vol. 487, c. 10MC.]

Rosie Winterton: We have been clear that if people claimed the benefit before they moved abroad, they are entitled to continue to claim it. For people who are eligible for it, it is frozen at the limit at which they received it before they left.

Edward O'Hara: There is an increasing prevalence of one-stop shops in local authorities. I visited one last week in Halewood in Knowsley where constituents can access all sorts of services, including health services, social services, housing services and so on. One of the problems, of course, is identifying and making contact with those older people. Have the Government given thought to offering older people benefit health checks when they visit that sort of facility? That is a way of contacting the people who would otherwise not be claiming the benefits that they are entitled to and deserve.

Rosie Winterton: My hon. Friend raises an important point. We have been looking through some of the Link-Age pilots at how we can ensure that people have a one-stop shop approach to accessing services. He is quite right to say that that can be used as a way of ensuring that people have a benefits check at the same time.

Hugo Swire: One of the gravest charges against this Government after a decade is that 60 per cent. of pensioners in deepest poverty are still not receiving income support, minimum income guarantee or pension credit entitlement. Given the Government's sustained attack on savers and the fact that there are now a number of proud pensioners in this country who have never claimed anything from the state and who shy from doing so, which leads to disguised poverty among pensioners, when will the Government wake up and present to those people that they, too, are entitled to some kind of support?

Rosie Winterton: I set out earlier the measures that we intend to take to ensure that people know their entitlement. We have made a number of changes to that. Of course, the hon. Gentleman might not be aware of some of the recommendations of the Turner commission about automatic enrolment and automaticity, which will make a difference.

Occupational Pensions

John Heppell: What recent steps his Department has taken to protect employees' occupational pensions.

Rosie Winterton: This Government introduced a more powerful and proactive pensions regulator to protect the benefits of occupational pension scheme members. We also established the Pension Protection Fund, which provides protection to more than 12 million members of eligible defined benefit occupational pension schemes. About 140,000 people will receive help from the financial assistance scheme.

John Heppell: I thank the Minister for that answer. With the CBI and the TUC telling both employers and employees that now is not the time to withdraw or withhold pension contributions, what can the Government do to strengthen that message and get it across to people that pensions are now safer and a better long-term investment than they have ever been in the past?

Rosie Winterton: My hon. Friend is right. I welcome the consensus on such a long-term approach. Obviously, fluctuations in markets will affect the value of assets in the short-term, but the fact is that it is the long term that is important for pensions. The framework that we put in place in 2004 is stable and durable, but it is important that we continue to work with the pensions industry to ensure that we respond to the points that are made. It is also important that we work together to give out the message that pensions are one of the best means to save for retirement.

Steve Webb: The Pension Protection Fund has been increasing the levy that it charges on company pension schemes each year, and it might now be approaching the ceiling that it is allowed to levy over the next few years, particularly as company schemes close. Once it reaches that ceiling, the only other way for it to make ends meet will be to cut pensions in payment. If it approaches the Government requesting permission to cut the value of pensions in payment, will the Minister guarantee that she will refuse such a request?

Rosie Winterton: The PPF has made it clear that it does not believe that it needs to increase the levy. In fact, it has frozen the current rates for the general levy and for the PPF administration levy. Of course, the hon. Gentleman will know that we have a rolling deregulatory review to see how we can make the systems simpler and less burdensome, and that we have reduced the revaluation cap from 5 to 2.5 per cent. These are all measures that we are taking to support pensions at the moment.

Gisela Stuart: In view of the fact that some employers have announced their intention to close their occupational pension funds not only to new members but to existing members, is the Minister's Department having discussions with such companies to try to dissuade them from taking such steps?

Rosie Winterton: As I have said, we are trying to set the general framework, so that we can do everything we can to support companies and the industry at this time. I have outlined a number of the measures that we are taking, but we will continue to work with the industry on some of the concerns that is has raised, to ensure that we maintain that dialogue with it.

Nigel Waterson: But does the right hon. Lady accept that the last line of defence for occupational pensions is the Pension Protection Fund, which some experts now believe to be heading for a £1 billion deficit? Does she believe that the extra burden should fall on struggling companies, or that the benefits paid by the PPF should be cut? Or is she now reviewing whether the Government should stand behind the PPF as guarantor?

Rosie Winterton: As I have said, the PPF has made it very clear that liquidity is not a problem. It has £3 billion in assets, and it is paying out about £4 million a month in compensation. It provides reassurance and an essential safety net, and it has made it very clear that liquidity is not a problem at this point.

Jobcentre Plus

Nia Griffith: What recent assessment he has made of the effectiveness of Jobcentre Plus services in dealing with an increase in the number of people registering as unemployed.

James Purnell: Jobcentre Plus continues to meet the demands of the rising number of people looking for work. Clearance times are at an average of 10 days, which remains the best performance since records started to be kept in 2003-04.

Nia Griffith: Some former Woolworths employees might be fortunate enough to get one of Asda's 7,000 new jobs, but for many other redundant workers, there might be a mismatch between their present skills and those required for any other jobs that are likely to become available in the foreseeable future. In the light of the comments of a former Woolworth's employee on television yesterday that she would have to be unemployed for six months before becoming eligible for any new training, what help with training can people expect from jobcentres, and what plans does my right hon. Friend have to introduce more flexibility in order to give redundant workers earlier access to training schemes, when that is clearly what is required?

Mr. Speaker: Order. May I gently say, as I have said before, that although it is important that we argue for those who are unemployed, there should be no written statements made in supplementary questions? Also, supplementary questions should be short; I do not expect a prepared statement.

James Purnell: My hon. Friend makes the important point that we should be getting help to people, even before they are made redundant. That is why we have been working with Woolworths and others to get help for people to retrain, if necessary, and to improve their CV and their knowledge of how to look for work. From day one of their unemployment, people are able to train, as long as they combine that with a job search, and, after six months, we step up the support that we offer to people. We think that that is the right approach.

Anne Milton: As we anticipate that mental illness is likely to rise with the rise of unemployment, what steps are the Government taking to ensure not only that the staff at jobcentres have adequate training but that they can refer people on so that they receive the necessary early intervention to ensure that their mental health does not deteriorate and further reduce their chances of getting back into work?

James Purnell: The hon. Lady makes a good point. We are working with pilots such as Talking Therapy, which she will know about, to make sure that employment advisers work side by side with therapists so that both employment prospects and people's mental health are discussed. It is also important that we do not forget about people on incapacity benefit or employment and support allowance because of their mental health. We need to keep up the support and continue to reform welfare so that such people are not left behind because of their specific conditions.

Phyllis Starkey: In her question, my hon. Friend the Member for Llanelli (Nia Griffith) referred to a situation in which a large number of people were being made redundant and in which training might therefore be offered. In Milton Keynes, there are more than 500 vacancies but large numbers of people are being made unemployed from a variety of different places. Can the Secretary of State think about how those people could be put on training almost straight away, to upgrade their skills so that they match the jobs available locally? There are no low-skilled jobs available for them.

James Purnell: That is a good point, and exactly why we say that people can train from day one as long as they combine that with a job search. Furthermore, if they have not found work after six months, we step up the offer so that there is either a full-time training course to support people setting up their own companies or a job subsidy to make sure that people do not become unemployed long term. The real danger is that long-term unemployment becomes the scar that defaced so many of our communities in previous recessions.

John Redwood: How big an increase in staff is the Secretary of State planning for this year to deal with the unfortunately very large increase in unemployment that most people are forecasting?

James Purnell: We are planning to recruit an extra 6,000 people.

Mortgage Assistance

David Wright: How much funding his Department plans to provide in 2008-09 to people with mortgages who have lost their jobs.

Kitty Ussher: We will provide the funding necessary to meet our commitment that people with mortgages who have been on income-based jobseeker's allowance for 13 weeks can get help with interest on up to £200,000 of mortgage capital. Updated expenditure projections will, of course, be published in the Budget.

David Wright: "Lose your job, lose your home" is the great fear that people have at this time. It is important that they should get quality advice when they first approach Jobcentre Plus having lost their jobs. There is a little confusion out there about the type of product on offer. The Government have made positive changes on support for people who have mortgages and lose their jobs. Will the Minister make sure that the advice given by Jobcentre Plus is of the highest quality?

Kitty Ussher: My hon. Friend makes a good point. People who have been in work for a while and are paying mortgage costs may not be aware that the Government can, in some circumstances, take the burden of paying mortgage interest from them. We will be judged on how we respond to the recession that currently faces so many countries. In previous recessions, under previous Governments in this country, people ended up out on their ears and out of their homes due to the large number of repossessions. We are making sure that we are providing support to people where they need it. The first advice is always to talk to the lender, but the Government will now help after 13 weeks.

Paul Burstow: Two months after the pre-Budget report, why are the Government still unable to set out the costs of their proposed mortgage deferral scheme and to say how many people will take up the scheme? Two months after a Government statement that promised action to help people with mortgage problems, there has been no delivery. When will the delivery take place?

Kitty Ussher: I simply do not understand the hon. Gentleman's point because, as I just said in answer to my hon. Friend the Member for Telford (David Wright), we will make the funding available to meet the commitments that we have stated clearly in the pre-Budget report. It has been estimated that, as a result of the more generous support for mortgage interest, about 5,000 repossessions will be avoided. Those repossessions might have taken place under the policies of the previous Conservative Government. Obviously, we are working with colleagues at the Department for Communities and Local Government to make sure that the package provided is what people want. Updated expenditure projections are always published in the Budget.

John Mann: Interest rates are at a record low and home ownership is at record levels. Is it not sound economics to keep everybody in their homes?

Kitty Ussher: As my hon. Friend will know, the Chancellor and the Prime Minister have been working with the Council of Mortgage Lenders to agree a deal to put to people who have mortgages with its banks and building societies. The details will be announced shortly; in fact, some have already been announced in the past few months. As a result of the pressure that we are putting on banks and building societies, the advice that we give people is clear: people should always talk to their lender first. There is flexibility there. After 13 weeks, the Government will help people on income-based jobseeker's allowance who are having difficulty with their mortgage payments.

Anthony Steen: Does the Under-Secretary agree that one way of reducing the number of unemployed people who have to seek mortgage help is by her instructing her officials, and the Chancellor instructing his, that bureaucracy in the Government should not impose the firm rules for VAT, PAYE and other taxes? Companies can then survive for longer than normal because they are not pursued by the bureaucracy, which, with its rigid, authoritarian approach, drives companies to the wall and creates greater unemployment.

Kitty Ussher: I do not know whether that point was directed to the hon. Gentleman's Front Benchers or to ours, but we have already announced that companies can simply ring the Inland Revenue if they need help with rescheduling their payments to the Government. We are providing the flexibility. The problem with the Conservative party is that it will not agree to increase spending at this time to make such flexibilities— [Interruption.]

Mr. Speaker: Order.

Clive Betts: The help that the Government offer families on income support with their mortgage payments is welcome. However, in many families, one partner may be on short-time working, or one may have lost a job while the other is still in work. Those families are not on income support, but their reduced income means that they struggle hard with their mortgage payments. Can the Government do anything to assist families in those circumstances? Otherwise, we will have a lot of avoidable repossessions.

Kitty Ussher: Absolutely. Obviously, every family is in different circumstances—that is why it is important that the Government can work constructively with the Council of Mortgage Lenders to ensure that banks and building societies give appropriate advice and flexibility to people in all sorts of circumstances. It is not in the interests of the banks and building societies for repossessions to take place.

Cold Weather Payments

Geoffrey Cox: When he next plans to review the mechanisms for triggering cold weather payments.

Kitty Ussher: The cold weather payment scheme is reviewed every year, normally in the summer. We consider the suitability of postcode to weather station links, and the effect of any changes to the postcode system made by the Royal Mail. Given today's inclement weather, I hope that you will permit me, Mr. Speaker, to say that £165 million has been paid under the scheme so far this winter, including £16.7 million today to 668,000 people.

Geoffrey Cox: That is all very well, but hundreds of my constituents have been and are being deprived of cold weather payments, to which they should be entitled, especially in upland areas, because of the way in which the temperature is measured. For example, the temperature for Dartmoor is measured in the centre of Plymouth, where it can be between three and five degrees higher. Will the Under-Secretary take steps to review the method of measuring the temperature so that people in upland areas in Dartmoor can receive their cold weather payments?

Kitty Ussher: We take the professional advice of the Met Office in determining which postcodes are linked to which weather station. As I said previously, if the hon. Gentleman wants to make representations on behalf of his constituency, they will be taken into account. I will look into the matter that he has raised.

David Taylor: Will the Under-Secretary reassure Labour Members that she will not revert to the sort of advice given by the former hon. Member for Salmonella and South Derbyshire in a previous Government: that older people should knit woolly hats? Does she agree that any action that we take should be tangible and well thought out, not specious and patronising nonsense, which probably damaged the woollen hat industry in my hon. Friend's part of the world?

Kitty Ussher: Indeed. My hon. Friend's point speaks for itself. We are providing real help, which is why the cold weather payment increased from £8.50 to £25 this winter—I presume that that increase would not happen under a Conservative Government, since Conservative Members voted against it.

Nicholas Winterton: Does the Minister not accept that many elderly and retired people are very responsible and thrifty, and although they might benefit from a cold weather payment, they will hesitate to turn up their heating to give them an acceptable quality of life during a very cold spell such as today and, therefore, could well suffer from hypothermia? Is there any way—perhaps by following the suggestion from my hon. and learned Friend the Member for Torridge and West Devon (Mr. Cox)—that one could re-examine the way that cold weather payments are met, taking account of the responsible and thrifty people who comprise a majority of our retired people?

Kitty Ussher: We are looking at improving the communication available to people as to whether they will be eligible. Everybody on pension credit as well as other low income groups will be eligible, even if the forecast rather than the actuality is an average of less than 0º C over a seven-day period. People can therefore act with confidence in the knowledge that they will get their payments quickly and in time for their next bill when it lands on their doorstep.

Lindsay Hoyle: My hon. Friend is aware that pensioners are afraid to put on their heating because of the high energy prices, but we must remember that huge profits are being made by the energy companies. Has she considered having conversations with the energy companies to see whether they will pass on some of their money to pensioners, rather than keeping the immoral profits? Let us see if we can ring-fence those profits and bring them back to pensioners through vouchers.

Kitty Ussher: My hon. Friend knows that that is rightly not a matter for our Department, but I agree with the point that he makes. That is why I am pleased that my right hon. Friends managed to negotiate the social tariff. I urge all energy companies to ensure that they pass on information about the availability of that to all their customers who may be eligible.

Jobseeker's Allowance

Tony Baldry: What proportion of the population in (a) the UK and (b) Banbury constituency is claiming jobseeker's allowance.

Tony McNulty: Latest figures show that 3 per cent. of the UK working age population and 1.7 per cent. of the Banbury working age population are claiming jobseeker's allowance.

Tony Baldry: Last Friday a weekly job club was launched in Banbury with the support of the whole community. Between 200 and 300 jobseekers turned up for the first day, which is an indication of how grim the situation is getting. What is Jobcentre Plus doing to ensure that notified vacancies are matched up to jobseekers as quickly as possible, and that jobseekers can as easily as possible access the Jobcentre Plus notified vacancies? Not every town has a Jobcentre Plus office.

Tony McNulty: I take the hon. Gentleman's point, which is why we are making sure that there is outreach work, for want of a better phrase, directed at smaller towns and areas. He will know that the Berkshire, Buckinghamshire and Oxfordshire district has developed a local employment partnership through which many of the notified vacancies are filled. About 45 per cent. of all vacancies are signed up to through the local employment partnership, but the hon. Gentleman is right to say that we must not only provide help and support, but get notified vacancies publicised to as wide an audience as possible. I will reflect on his point about rural areas and the sparsity of provision of Jobcentre Plus offices. They cannot be everywhere. Much of the work that we do in respect of notified vacancies is over the phone or the internet. None the less, it is a fair point and I will reflect on it.

Hugh Bayley: Women in the retailing and hospitality industries, especially those in part-time jobs, are particularly vulnerable at this time. What is Jobcentre Plus doing specifically to address the needs of women workers who lose their jobs?

Tony McNulty: Again, that is an entirely fair question. On the figures up to now, I do not concur entirely with what the TUC said about last month's figures—that this is turning in to an equal opportunities recession, with a disproportionate impact on women—save for the fact that we know that in all downturns or recessions, part-time work, short-time work and temporary work are the first to go. Those are the very categories that include women. We are making sure that Jobcentre Plus is doing all it can not just for women who present, but especially for those from the retail sector. Our colleagues will know and understand that, as I said in my previous answer, we need to link up much more directly the vacancies out there in the retail sector with those recently made unemployed in the retail sector. It is a fair point that— [Interruption. ] Along with the impact on young people and others, we need to keep an eye on that point during these serious times, which the Opposition clearly are not bothered about.

James Clappison: Do we not have to put the figures that the right hon. Gentleman gave to my hon. Friend the Member for Banbury (Tony Baldry) against the background that the number of UK workers in work went down last year, while the number of non-UK workers has gone up, with most coming from outside the EU? Is it not the case that we need effective control over work permits for workers coming from outside the EU? We also need an effective welfare-to-work policy for the nearly 2 million people who are unemployed, and for the additional 2 million economically inactive people who want to work, but who have been left to languish on benefits. Can we have less spin, less dithering and some fresh thinking please?

Tony McNulty: I am surprised that the hon. Gentleman has the front to say "less spin" at the end of that question. He does make some serious points, but let us be clear: about 8 per cent. of those in employment are foreign nationals and UK nationals account for more than nine out of 10 people in employment. Well over half of the increase in employment since 1997 is accounted for by UK citizens.
	Through the points-based system, we are improving considerably the situation regarding work permits. Broadly speaking, the hon. Gentleman and his colleagues agree that there should be a focus on the economy and the skills shortage in the migration process, but he must be careful when using the other figures that he bandies about. Either he is conflating the International Labour Organisation and incapacity benefit figures, or he is— [ Interruption. ] It is not possible to use them to arrive at the figure cited by the right hon. Member for Maidenhead (Mrs. May) of more than 5 million, giving the impression that they are all economically inactive, without including—at least in part—those on disability living allowance, many of whom are in work, and carers, to whom it is a complete insult to suggest that they are in such a position.

Mr. Speaker: I am going into injury time, and I call the hon. Member for Vale of York (Miss McIntosh).

Jobseeker's Allowance

Anne McIntosh: How many jobseeker's allowance claimants there are in (a) England and (b) North Yorkshire.

Tony McNulty: Non-seasonally adjusted figures show that 959,419 people are claiming jobseeker's allowance in England and 7,197 in North Yorkshire.

Anne McIntosh: Can the Minister tell the House what happens at the end of six months when those claimants come off jobseeker's allowance? Do they no longer feature on the register of the unemployed? How many of them are in work? It is an absolute scandal that those people receive money for six months, and then are no longer either in employment or on the unemployment register.

Tony McNulty: Their numbers are reflected in the ILO figures, which is why we accept without comment the notion of two sets of figures. I thought that the hon. Lady was going to say how wonderful it was that Yorkshire Forward and the Government have agreed on £54 million Train to Gain funds for those recently made redundant in Yorkshire. It is a shame that she did not want to celebrate that.

Topical Questions

Angela Watkinson: If he will make a statement on his departmental responsibilities.

James Purnell: The Government are determined to avoid the mistakes of previous recessions when, too often, short-term job loss became long-term unemployment. In addition to the £1.3 billion in extra investment through the pre-Budget report, we have now taken further action through an extra £500 million of support for people who have been on jobseeker's allowance for six months. Those measures will mean that personal advisers can offer a range of additional options to help people to get the support that is right for them so that they can get back to work.

Angela Watkinson: Will the Secretary of State clarify the Government's plans to compensate Equitable Life pensioners? Will he take this opportunity to reject any suggestion that only those policyholders who are experiencing financial hardship should be compensated? It was not the recommendation of the parliamentary ombudsman that compensation should be means-tested. It should be paid to everyone who has suffered loss caused by regulatory failure.

James Purnell: The Government have apologised for the problems that occurred under both the hon. Lady's Government and ours. We have said that we will make ex gratia payments, but that is a matter for the Treasury, and she is very welcome to ask the Treasury that question.

Joan Walley: I very much welcome the relaxation of the 16-hour rule and the fact that it is possible under the national voluntary training pathfinder for people in certain categories to get into training quickly. However, given the recession and the number of people in Stoke-on-Trent who find themselves out of work, there is an urgency about ensuring that they can access training from day one. Will my right hon. Friend review the integrated employment and skills framework, and will he get back to me on this issue?

James Purnell: I hope that I can do better than that. People can train from day one, as long as they combine that with a job search. Indeed, they can train earlier. For example, with Wedgwood and other major redundancies, we are going in from the moment that they are announced, to see whether we can retrain people so that they can get a new job, either in the same sector or, potentially, one that is close, but different. We want to provide training whenever it is appropriate.

David Jones: Given the rapidly worsening employment position in Wales, as illustrated most recently by the loss of 1,100 jobs at Corus last week, can the Secretary of State say how much his Department liaises with the Welsh Assembly Government to ensure that those affected by redundancies receive as seamless a service as possible from all levels of government, to help address the financial consequences of their job loss and to prepare themselves for new employment?

James Purnell: We work together very closely; indeed, I met the First Minister recently to discuss how our employment policies could be best dovetailed. We have learnt from the ReAct and ProAct schemes that the Welsh Assembly Government introduced, which we have used for the six-month offer that we have introduced, which includes employment subsidies and training. We are learning from what is working in Wales and across the whole country.

Ashok Kumar: In my area of Teesside, a nylon plant is going to be closed down after 50 years in operation and 300 highly skilled people will be made redundant. What support can the Government give to those highly skilled people at this very difficult time and what help can they give, so that they can find alternative work?

Tony McNulty: I hope that in the first instance Jobcentre Plus will send in its rapid response service to deal with those individuals long before the redundancies kick in. That has been done successfully elsewhere, notably with Woolworths and some other companies, often on a regional basis, but I would be happy to talk to my hon. Friend separately about ensuring that it happens in this instance, too.

Douglas Carswell: The Government have admitted that unemployed people entitled to support with mortgage interest payments have on occasions received less than they should have done, owing to a computer glitch. How many people have been underpaid and by how much, and can the Minister now give an undertaking that not one of those affected will lose their home?

Kitty Ussher: I can absolutely give the hon. Gentleman that assurance, because increased payments are going out from today for the next few weeks, so that the overall payment received by people is exactly the 6.08 per cent. that my right hon. Friend the Chancellor specified in the pre-Budget report. Just by way of explanation, the reason why people's payments dipped slightly—and why they will be higher, so that the average is precisely 6.08 per cent.—is that the Bank of England reduced its base rate on 6 November, but the pre-Budget report was not published until 24 November. In the intervening period, our automatic tracker system went into effect, which meant that some payments were reduced, but that is now being compensated for. I hope that that answers the hon. Gentleman's question, although I will write to him with the precise number of people affected.

Robert Flello: Sadly, with the huge decline in jobs in the ceramic's industry in north Staffordshire over many years, the trade union Unity, the former ceramic union, has extensive experience of helping people back into work. Is my right hon. Friend aware of the work being done, particularly at Wedgwood recently, and would he care to visit my constituency to see the factory and meet workers and others affected by the downturn?

Tony McNulty: At the risk of accepting every invitation, I am very happy to meet my hon. Friend in his constituency to talk to Unity and others, not least about the work that the rapid response service has been doing and how it has helped, and about the outstanding difficulties in the ceramics industry.

Julie Kirkbride: All Ministers present will be aware that the benefit system deems people to be earning a rate of almost 10 per cent. on their savings when it makes benefit calculations. Can any one of the Ministers tell us where such a rate of interest can be secured in these straitened times, when the bank rate is plunging towards zero? If they cannot, can they tell us when those assessments will be fairer?

Rosie Winterton: I can assure the hon. Lady that there is no 10 per cent. rule. Tariff income is a simple method of calculating the contribution that people with £6,000 of capital are expected to make to help meet their living costs. Under the previous Government, anyone with savings over £12,000 was not eligible for any support at all. Also, the less generous rules assumed £1 a week income for every £250 of savings. The rate of tariff income is now half the previous rate, and we also abolished the upper capital limit, giving more people access to more support.

David Hamilton: The Government have made it clear that training payments will be available to major companies that train those who are still unemployed after six months. Midlothian council is by far the biggest single employer in my constituency. Will the Secretary of State ensure that all local authorities are also entitled to that payment for training requirements?

James Purnell: I am happy to meet my hon. Friend to discuss that. We want to make sure that we use the training subsidies in the most effective way possible. It is just a shame that the Scottish National party Government are cutting training, rather than increasing it.

Michael Penning: As the Secretary of State is aware, the Buncefield incident decimated the commercial sector in my constituency. Sadly, unemployment is now 30 per cent. higher than it was in 1997. Lord Newton's report specifically said that Hemel Hempstead required special status to help regeneration. Where is that help?

Tony McNulty: Although I am more than aware of the circumstances of the Buncefield fire, I do not know what is happening across government to provide the help mentioned in the report. I am happy to meet the hon. Gentleman, or indeed to write to him in fuller detail.

Andrew Miller: The administrators of a company called Gibsons in my constituency have thus far failed to answer questions that I have raised about the employment rights of the people who were made redundant after the factory closure. Will my right hon. Friend the Secretary of State encourage Jobcentre Plus to impress on employers their duties and responsibilities when they make redundancies? In this particular case, if my right hon. Friend finds anything suspicious, will he ensure that his colleagues in the Department for Business, Enterprise and Regulatory Reform are made aware of it?

James Purnell: I think that my hon. Friend has just made my colleague from that Department, the Minister for Employment Relations and Postal Affairs, aware of the matter. We want administrators, and companies that are going into administration, to live up to their responsibilities to their employees, and we want to make sure that they provide as much information as possible. There have been cases in which administrators have been reluctant to do that, and have even been reluctant to let in the rapid response service. We would be very worried if that continued to be the case. We want administrators and companies to help people who have lost their jobs as much as they possibly can.

Richard Younger-Ross: In Newton Abbot, Jobcentre Plus shares offices with Her Majesty's Revenue and Customs. What assurances can the Secretary of State give that those people in Revenue and Customs whom his Government are about to make redundant will be found employment by their colleagues downstairs?

James Purnell: I can assure the hon. Gentleman that we are working with HMRC to see whether precisely what he suggests can be done. If there is an opportunity to transfer people from Revenue and Customs to Jobcentre Plus, to which we are recruiting more people, we will do so. We are already in discussions with it about how that can be done.

John Grogan: Does my right hon. Friend agree with the Secretary of State for Health, who yesterday called for a revision of the European posted workers directive to prevent the undercutting of terms and conditions, particularly in the construction sector, and to deal with various judgments of the European Court of Justice?

James Purnell: If my hon. Friend is patient for just three minutes, he can ask that question of the person who is responsible.

Graham Stuart: The Government used migrant workers artificially to boost employment over the past 10 years, when 80 per cent. of new jobs went to foreign workers. Does the Minister for Employment and Welfare Reform now accept that there has been a failure to tackle the skills problem in this country, and to carry out the necessary welfare reform to make workers in this country best fitted to compete in these more difficult days of recession?

Tony McNulty: The hon. Gentleman's starting premise is entirely flawed. The answer to the first part of his question is no, and the answer to the second part is nonsense.

Stephen Ladyman: A lot of people take out payment protection insurance during their working life. Do my right hon. and hon. Friends on the Front Bench think that it is fair that when those people lose their jobs, payments made under that payment protection insurance scheme are treated as income when they apply for unemployment benefits? If not, will they agree to review the situation?

James Purnell: I am happy to look into that issue. My hon. Friend raises an important question, and I shall write to him to let him know.

Greg Mulholland: On this day of extreme cold weather, may I ask when the Government are seriously going to introduce proposals to extend the winter fuel allowance to severely disabled people, including groups of terminally ill people? Such people include my constituent, Matthew Pinder, who today will be sitting at home in his front room with one fire on because his family say that despite whatever the Government have said, they do not have enough money to heat their home.

James Purnell: That is precisely why we increased the Christmas bonus by £60 this year—that will go to people who are disabled. It is worth saying that there was no winter fuel allowance under the previous Government—we introduced it. They used to spend just £60 million a year, whereas we now spend billions on ensuring that people receive help in winter. We do so precisely because we want to ensure that people do not have to choose between heating their home and fending for themselves.

Lindsey Oil Refinery

Patrick McFadden: With permission, Mr. Speaker, I should like to repeat a statement being made by my noble Friend the Secretary of State for Business, Enterprise and Regulatory Reform in the other place about the industrial action at the Lindsey refinery and elsewhere in the country.
	On Thursday and Friday last week, contract workers at the Lindsey refinery in north Lincolnshire and elsewhere took part in unofficial industrial action. That has been followed today with further such action at Sellafield power station and other sites around the UK. The stated reason for such action is said to be that a contract awarded at the Lindsey site to an Italian contractor, IREM, has resulted in discrimination against British workers through the exclusive employment of Italian and Portuguese workers. On the Lindsey site, the great majority of the workers are British. I understand that all the striking workers are from maintenance or enhancement projects on the sites; and as of this afternoon there is no disruption of production at any of the sites where this unofficial industrial action is taking place.
	On Friday, my Department asked ACAS, the independent arbitration service, to meet the employers and the unions to examine the various accusations being aired and to establish the facts—we expect its report very quickly. ACAS was in touch with the parties over the weekend and I understand that the first meeting is taking place today. ACAS's first responsibility is to report to us on whether laws have been broken; if they have we will take action. We are determined to see robust enforcement of the employment rights legislated for by this Parliament, and the fair and proper application of the European rules that govern the operation of companies throughout the EU and the mobility of labour, which has always been an intrinsic part of membership of the EU and has been supported by successive British Governments.
	In a statement issued yesterday, the energy company Total, which runs the Lindsey site, said:
	"It has never been, and never will be, the policy of Total to discriminate against British companies or British workers."
	It went on to say that it subcontracts on a fair and non-discriminatory basis and that the wage rates are the same as for equivalent jobs on the site.
	Two key accusations have been made in recent days. The first is that the use of labour from overseas leads to an erosion of wages and conditions for all concerned because these workers are paid less than UK workers. The second is that there is discrimination in recruitment practice against British workers. The statement issued by Total last night confirmed that workers from overseas are paid at the same rate as other workers on site, and it further confirmed that Total does not operate any policy of discrimination with regard to tendering or recruitment.
	The same rules apply here as with UK companies bidding for work overseas, and I would remind the House that there are some 300,000 UK companies operating elsewhere in Europe. Subcontracts can be bid for by UK or overseas-based companies. Of course, if an overseas company wins a contract it can use its permanent employees to carry out the work, but Total has confirmed that where new vacancies are advertised, it will work with subcontractors to ensure that UK workers are considered in the same way as anyone else.
	The workers coming here from Italy and Portugal are protected by the EU posting of workers directive, which the UK has implemented fully. It guarantees those workers minimum standards, for example on pay and health and safety, and facilitates the free movement of services within the European Union—a vital market for British companies. In the case of the Lindsey refinery, we have been informed that all subcontractors adhere to the national agreement for the engineering construction industry, which governs terms and conditions, working hours and pay.
	Membership of the European Union and taking advantage of the opportunities for trade presented by the EU are firmly in the UK's national interest. Free movement of labour and the ability to work across the EU have been a condition of membership for decades. It is important that we respect and guarantee that principle, not least because it guarantees the right of hundreds of thousands of British workers and companies to operate elsewhere in Europe. It illustrates the importance of Europe to the UK that half our £370 billion of exports per year go to the EU, half our £315 billion inward investment comes from the EU and between 3 million and 3.5 million UK jobs are linked both directly and indirectly with our trade with the EU.
	At a difficult economic time, we fully understand the anxieties that people have about their jobs. That is why we have been taking the measures that we have to support people through these difficult times. We strongly believe in fair opportunities for everyone in this country and in ensuring that British people have access to advertised job vacancies. It would be quite wrong, and indeed against the law, for companies to advertise vacancies and exclude British people from them. Equally, it would run contrary to the principles of the single market and harm British people working abroad if we were to exclude foreign workers from employment in the UK.
	Of course, we understand the concerns of workers at a time of economic difficulty, and we have now established a mechanism through the ACAS process to examine those concerns. It is through that strong and independent process that we should proceed, not through the continuation of the unofficial industrial action that has been taking place. Our aim is to get through the economic difficulties that we face with Britain continuing as a great trading nation, with our companies able to operate worldwide and our workers equipped for the jobs and industries of the future. I commend this statement to the House.

Kenneth Clarke: May I first ask, for the sake of clarification, for reassurance that this is a statement of the whole Government, not just the Department for Business, Enterprise and Regulatory Reform, and that the Secretary of State for Health has now recanted and been enlightened, and accepts what has been said? Most importantly, will the Minister confirm with clarity whether the Government believe that the posting of workers directive is satisfactory and working fairly in our interests, or whether they are seeking amendments to it? That has been left quite unclear in all the interviews given by Ministers so far.
	Does the Minister accept that all responsible people will agree with him that however aggrieved people feel, industrial action at power stations and oil refineries at the present time of national crisis is not the way to take forward any of their arguments? The unions should help to get people to desist from that. Does he accept also that we do not want to see riots in Italy about British workers there at a time when British companies are seeking contracts on the continent for their British workers to engage in employment there?
	However, does the Minister also accept that understandable worries at the present time have been turned into direct action as a result of the Prime Minister's irresponsible use of the phrase "British jobs for British workers"? Is it not clear that that phrase was populist nonsense at the time when he used it—it was part of some curious Britishness agenda, which I seem to recall he was pursuing for reasons of his own at the time—that he was concerned more with his job security than with anybody else's job security in this country, and that we will all welcome the fact if he never repeats it, no Minister ever repeats it and no such irresponsible statements are made by any member of the Government at any time in the future?

Patrick McFadden: I should take this opportunity to welcome the right hon. and learned Gentleman back to the Conservative Front Bench. He brings great experience to his role. I always feel that, particularly when we are discussing issues of European competence, he may have more in common with Labour Members than with some Members behind him, but we will see how the debate develops.
	The right hon. and learned Gentleman asked a couple of specific questions. As I said in the statement, we have fully implemented the posting of workers directive. It has been in place for some years, and as for many such directives, the European Commission has established a group to look at its operation, and we will see if it makes any recommendations.
	As for the statements of the Prime Minister to which the right hon. and learned Gentleman referred, never at any time has the Prime Minister said or implied that he or the Government are opposed to the free rights of British companies to operate throughout the European Union or of European companies to operate here in the UK. What the Prime Minister said, quite rightly, was that, as a country, we needed to do more to equip the British work force for the jobs, skills and industries of the future. That is precisely what we are doing. That is why, while apprenticeships declined when the Conservative party was in power, we will grow apprenticeships to some 0.5 million, and we will stand by our commitment to equip British workers for the future.

Shona McIsaac: As I am sure the whole House can appreciate, I have spent the past few days taking part in many discussions about the situation affecting the refinery in my constituency. I welcome the promise that ACAS is now to be involved and will be meeting both sides in the dispute to examine the accusations that have been made on both sides. However, does my right hon. Friend appreciate that for skilled engineering and construction workers who are currently out of work, seeing contracts going elsewhere can be very toxic? What can he say to those people, of whom there are many in my constituency and others, who have such skills and who are out of work? What can be done to assist them to get jobs, which they so desperately want at the moment?

Patrick McFadden: I know that my hon. Friend has been closely engaged with this issue in recent weeks, and that she is doing everything she can to help her constituents in a positive and responsible manner. On future employment, I would say two things to her. The first thing we have to do is maintain our investment in infrastructure, and not cut it, as the Conservatives would, and that means continuing with rebuilding our energy and transport infrastructure, and with other important projects of national significance. The other thing that will support employment for her constituents, and those of all hon. and right hon. Members, is for this country to maintain its positive stance as a positive member of the European Union, to continue to look outwards and trade globally, and, in so doing, to increase wealth for the UK and employment in the UK.

Jeremy Browne: We welcome the statement, but it has been made necessary because of the reaction to the cynical and undeliverable statement by the Prime Minister at the Labour party conference in 2007 that there would be British jobs for British workers. That statement was as misleading as the Prime Minister's other promise to abolish boom and bust. That economic failure caused the understandable anxiety in the country at the moment, with Britain plunging deeper into recession, unemployment soaring and the final hallmark of all Labour Governments—increasing industrial unrest.
	Pulling up the drawbridge cannot be the right response. British companies and citizens benefit from the free movement of goods and services across the European Union. Does the Minister agree that many in Germany and France who see a falling pound feel it is unfair that British businesses are gaining a competitive advantage as a result of changing exchange rates? I agree with the right hon. Gentleman and accept his comments that all new jobs must be open to all workers and that employment law must be upheld, but does he agree that protectionism, whether it is being advanced by the new President of the United States or by isolationist right-wing commentators in Britain, would be ruinous for our country and must be avoided?

Patrick McFadden: I appreciate the hon. Gentleman's welcome for the statement and his positive comments on Britain's role as a member of the European Union. I agree that unofficial industrial action is not the way to resolve the concerns that have been expressed. We have set up a process through ACAS, which will involve the employers and the trade unions, to air the concerns that have been expressed, and as I said, the statement issued last night by the energy company Total addressed some of those concerns.
	The hon. Gentleman is right about protectionism. If we look at past history and the economic problems of the last century, we can see that a retreat from looking outwards and a retreat from world trade would indeed mean that protectionism became a sure-fire way of turning recession into depression.

Austin Mitchell: Does my right hon. Friend accept that this is not an attack on the mobility of labour in the EU, but an objection to the fact that one contractor—the Italian contractor—is bringing in its entire work force of several hundred people for one particular contract? This is a plea: in all the other jobs that will come into being with the contract for the closure and reconstruction of the Lindsey oil refinery, preference should be given to British workers, and to local workers, in an area of high unemployment where the skills are available. As well as sending in ACAS, should not my right hon. Friend be convening a meeting in London of the big oil companies, contractors and unions to allay the workers' fears for British jobs and to see that the posting of workers directive is working properly?

Patrick McFadden: As I said, the vast majority of workers on the site are British. It is legal for a European company to contract for work and to say that it will use its permanent employees to carry it out. The issue of discrimination arises if new vacancies are advertised, and the statement issued last night by Total, which runs the site, made it clear that if new vacancies are advertised the company will work with all its subcontractors to make sure that UK workers are considered in the same way as anyone else.

Peter Lilley: Although this dispute relates to the employment of European workers under European law, about which little can be done—at least in the short term—does the Minister accept that the reason why it has had such tremendous resonance across the country is people's concern about the huge flux of immigration into the UK in recent years, a large part of it from outside the EU, which has accounted for a majority of the new jobs of people of working age? Last year, the total number of work permits issued was a record, at about four or five times the level when the Government were elected, so can he assure us that from now onwards far fewer work permits will be issued and, in particular, that people for whom no job is immediately available will not be issued with work permits allowing them to come to the UK just looking for jobs as, extraordinarily, the Government now permit?

Patrick McFadden: The issue at the Lindsey oil refinery, of course, involves European workers coming here, as I said, under the rules of labour mobility that have existed for some decades. The right hon. Gentleman asks about non-EU immigration; on that issue, the Home Secretary and my colleagues at the Home Office have set out the new points-based immigration system, which is intended precisely to gear our needs more closely to immigration from outwith the EU. I would also say to the right hon. Gentleman that immigration from outwith the EU has made a tremendous contribution to this country. That is true of my constituency, and I am sure it is true of many others.

Kate Hoey: Will the Minister use this opportunity to dissociate himself from the remarks made on this morning's "Today" programme by the Secretary of State, who made what I thought was a rather silly comment implying that the answer to all the workers who are worried because they are not getting these jobs was for them to go off and get a job abroad?

Patrick McFadden: I am afraid that I disagree with my hon. Friend; that is not what the Secretary of State has said. What he said was that the rules of trade across the EU benefit EU companies and British companies and that we, as a positive member of the EU, gain by that, which is why we do not intend to change those rules of open trade. He was certainly not harking back to comments made at another time about people getting on their bikes. That is not what he said or what he meant; it is a distortion of what he said.

Damian Green: May I congratulate the Minister first on not quite being able to bring himself to defend the Prime Minister's cheap populism, and secondly on rightly expressing the importance of the free movement of workers within the EU, from which this country and British workers have benefited? If he wants to lower the temperature out there in British industry, however, may I commend to him the policy of having an explicit annual limit on work permits issued to those coming in from outside the EU, because that would do a great deal to restore confidence in the fact that our immigration system is actually under control, as opposed to the current feeling in the country that for years it has been out of control?

Patrick McFadden: Once again, the hon. Gentleman tries to tempt me away from the operation of the EU rules, into a general discussion on immigration policy. I am not sure quite what cap or number he wants, but as I said, this Government have set out a points-based immigration system for non-EU immigration, which is aimed precisely at matching our needs to the flow of immigration from beyond the EU.

Ian McCartney: Will my right hon. Friend ensure that ACAS talks not just to Total, but to Alstom, the subcontracting company, which subcontracts again to another company? It is that company that is causing the problem; it has a record of trying to breach the national agreement in respect of agency workers. That loophole was closed through the agency workers directive, and it is critical in this situation that ACAS looks into what is happening with Alstom as well as with Total.
	In the coming weeks and months, as this is resolved, and there is a procurement process involving millions of public opportunities, a corporate social responsibility clause should be agreed by the Government to ensure that subcontractors as well as main contractors work to the national agreement, and that there is a commitment to creating local jobs and services in these big contracts, so that communities benefit, not just big companies.

Patrick McFadden: My right hon. Friend has tremendous experience in these issues and his words should always be listened to seriously. With regard to ACAS talking to Alstom, I am sure that it will talk to all the major employers in this field that it can. With regard to the national agreement, Alstom has informed us that it abides by the agreement, but that is precisely why we asked ACAS to look at the issue. A number of claims have been aired in the past few days, and it is right to get ACAS to take a dispassionate and impartial look at those claims, so that we can establish the facts.

Peter Luff: To what extent have skills shortages contributed to the difficulty of filling those British jobs with British workers?

Patrick McFadden: As the Prime Minister has said, we need to do more as a country to improve our skills base, but this is not just about the skills of individual workers, but about the companies that apply to do the work, some of which may do so with a permanent work force whom they deploy to do the work. It is not just about the skill of the individual worker, but about the whole package that a company brings when it bids for a contract.

Russell Brown: I congratulate my right hon. Friend on the statement and his comments that he is determined to ensure the robust enforcement of employment rights in this country. Other hon. Members and I attended a meeting a few weeks ago at which we considered the economic climate in this country, in Europe and across the world. Comparisons were made with the difficulties that arose in Europe in the late 1920s and early 1930s in order that we may learn from history and ensure that history does not repeat itself. What we have heard in recent days worries me greatly. We all need to be very temperate in our language and ensure that we do not again see what happened in the late '20s and early '30s and play into the hands of and pander to the extreme right in any country.

Patrick McFadden: I quite agree with my hon. Friend that we should not pander to the extreme right. He refers to history, and that is relevant on two counts. First, in response to an earlier question, a retreat into protectionism would be a mistake for us and for the rest of the world economy if it was repeated in countries elsewhere. He is absolutely right that, since the end of the second world war, the establishment and growth of the European Union has helped to ensure not only peace but far greater prosperity for its citizens, and we should seek to maintain that in the future.

Nicholas Winterton: The right hon. Gentleman opened his statement with some so-called statistics about the benefits of the European Union that, in my view, are at the very least open to debate. Does he not accept, as many trade union leaders believe, that there is problem with the labour mobility directives? The UK Government have not on all occasions stuck up for British interests. If he is interested in seeking to reduce tension on this subject, perhaps he will produce a balance sheet of the number of projects that UK companies are carrying out in France, Germany and Italy, for example, as against the number of projects that are being carried out by those countries in the UK. Perhaps that would give people the facts of the case. Will he do that?

Patrick McFadden: I appreciate that for certain hon. Members any positive statement about the European Union can sometimes be difficult to digest. It is very clear that membership has been good for our trade and growth and for the other matters hinted at by my hon. Friend the Member for Dumfries and Galloway (Mr. Brown). The labour mobility rules have been part of the EU for decades—they have not been invented in the past year or two. Labour mobility—the freedom to work throughout the EU in different member states—is one of the basic conditions of EU membership. That is worth bearing in mind in the current circumstances.

Nick Ainger: My right hon. Friend will be well aware that two large liquefied natural gas terminals are being constructed in Milford Haven and that there are Polish and Portuguese workers on those sites, but that they are seen as being in addition to local and UK skilled Labour. Does he agree that something is seriously wrong if, in the case at Lindsey and other cases around the country, the national agreement is being abided by, yet local UK-based companies are not successful in their tenders? My hon. Friend the Member for Great Grimsby (Mr. Mitchell) suggested a meeting with all parties to consider the issue. It is absolutely essential that major clients, main contractors, the trade unions and the engineering construction industry sit down with the Government to work out why foreign companies are able to outbid British companies.

Patrick McFadden: I must take issue slightly with my hon. Friend. What is important is an open and fair bidding process for contractors to win the work. We cannot put ourselves in a position whereby every time a non-British company wins a contract, we say that it is unfair. British companies are operating successfully throughout the rest of Europe and throughout the world. What is important is that the rules are applied fairly and properly.
	I agree with my hon. Friend about dialogue and interested parties. It was for precisely that reason that, over the weekend, we established the ACAS process to examine some of the claims. Let us see whether the law has been broken. Let us see whether European rules have somehow been contravened. That is what ACAS is doing, and that is why the first meeting was held today.

John Mason: It seems to me that much of this depends on Total's statement and what has been said by its subcontractors. Are we expecting ACAS to audit the statement, or should other parties do it?

Patrick McFadden: I believe that ACAS is the right body to examine the statement. I believe that it is perfectly capable and perfectly qualified to do so, and that it is respected by both employers and trade unions. That does not mean that we accept every statement made by everyone at face value. It was precisely in order to establish the facts properly that we asked ACAS to look into the issue.

William Cash: The Minister may know that this morning, on a television programme, Derek Simpson said that the Prime Minister had had meetings regarding the three rulings of the European Court only about a month ago, and that some action was expected as a result of those discussions. He added, in reply to a question, that it appeared that that action had been dropped. Can the Minister tell us what action was proposed, and whether it was in line with what the Secretary of State for Health said on the programme yesterday?
	Will the Minister also ensure that if it is impossible to overcome the European Court rulings—which we all know is the case—we will legislate in the House of Commons to ensure that we provide proper and fair treatment for the workers and trade unions of this country?

Patrick McFadden: I am sure that the workers and trade unions of this country will welcome the hon. Gentleman's strong support. I believe that he was referring to a series of European Court judgments issued over the past couple of years on pay differences between posted workers and workers employed locally. If the statements that have been made are true and, in the subcontracting cases that have been cited in recent days, the same pay rates apply throughout the site, it would appear that the issue of a race to the bottom in wages does not apply in this instance. As for the judgments themselves, as I have said, a European Commission body is examining the operation of the Posting of Workers Directive, and a social partners dialogue on the judgments is in progress at European level.

Jeremy Corbyn: Does the Minister accept that there are some very nasty undertones to the discussions surrounding the disputes? In times of difficulty, the traditional role of the Labour party, the labour movement and the trade unions has been to oppose xenophobia and discrimination and to try to engender a sense of solidarity among all workers to enable them to face the difficulties together. Will the Minister convey the message that we want people to be united in the face of economic difficulties, rather than some turning against others on the basis of their passports or ethnicity?

Patrick McFadden: I certainly agree that the rules of labour mobility, to which I have referred, and the rights to work across the EU have been in place for decades. I also agree, and have said, that workers from the EU and from outwith the EU have made a strong contribution. I understand that in times of economic difficulty there will always be heightened concerns about jobs. If those concerns include an allegation that the law or rules are being broken, we will look at them, and that is precisely what ACAS has been charged with doing. However, we will not turn our back on trying to reach out, trade openly and grow our wealth through our links throughout the world. We will take a positive stance on world trade and UK companies operating abroad, because that benefits our country.

Michael Fallon: Given the union complaint that it is the transport and accommodation of these workers that may be unfairly subsidised, will the Minister clarify the Government's position? Is it that he wants to be sure that the directive is not being broken, or is he at all concerned to improve its working?

Patrick McFadden: Our concern is twofold. First, we want to ensure that the domestic employment laws passed by this Parliament are properly observed and enforced. On that subject, we have put increased resources—for example through minimum wage enforcement—in place in recent years. Secondly, we want to ensure that the European rules that apply both to UK companies operating elsewhere in Europe and to European companies operating here in the UK are properly and fairly applied. In recent days, there have been allegations on both counts that that may not be the case, and that is precisely what we have asked ACAS to look at.

Peter Hain: I agree with the Minister that right-wing anti-Europeanism and protectionism would be disastrous for British workers. Do I understand from his statement that ACAS will investigate the implementation of employment rights in respect not just of statutory minimum standards such as the minimum wage, but the national collective bargaining agreements that apply at all of those sites? The wages there are many times higher than the minimum wage. I still find it puzzling that European companies can bring their labour in, meet all the costs of accommodating and transporting them—both to this country and to and from work—and still claim to abide by national pay rates and conditions of service. That does not seem to add up, and I wonder whether the real answer to that puzzle is to be found in the fact that these subcontractors subcontracted all the way down the line to a point at which nobody really knew whether the workers concerned were being exploited or whether local workers were getting the justice and fairness to which they are entitled.

Patrick McFadden: My right hon. Friend asks several questions, which I will try to answer. He asks about the national agreements setting standards that are higher than the basic minimum wage. He is right about that. Claims have been made that the subcontractors on the Lindsey site abide by the national agreement, and that is a legitimate issue for ACAS to look at. He mentioned the costs involved and I suggest that employers may not always choose the cheapest tender, and that speed or the overall package that a subcontractor offers may be strong factors. The statement issued last night said that the subcontractors did abide by the national agreement, and ACAS will doubtless examine that claim with the employers and the unions involved.

David Heathcoat-Amory: Is it not a sad fact that whatever changes the Government or the House may wish to make to the laws governing foreign contracts or the conditions attached to foreign workers, we are unable to make those changes because they are entrenched in superior EU law? Since that powerlessness is undoubtedly an element in the present frustrations, is the Minister aware that changes are on their way, because my right hon. Friend the Member for Witney (Mr. Cameron) has recently confirmed that it will be
	"a top priority for the next Conservative Government to restore social and employment legislation to national control."

Patrick McFadden: The right hon. and learned Member for Rushcliffe (Mr. Clarke) clearly knew what was coming and thought that he had better get out before hearing that statement. If the time ever came when the Opposition were to get into power, I would be interested to see whether the right hon. and learned Gentleman would be able to support the policy that the right hon. Member for Wells (Mr. Heathcoat-Amory) just outlined. The right hon. Gentleman knows that the policy that he outlined—to resile from the European legal settlement that goes with membership—would end in a clash and that, ultimately, it would lead to withdrawal from the European Union. If that is his policy, he can defend it. I have set out a policy today of positive membership of the EU and positive trade throughout the EU that brings wealth and employment to our country. Although that can be difficult, it is not something that we will turn our backs on.

Frank Field: Will the Minister allow me to express my dismay at the way in which he has interpreted the law, which allows European companies to win contracts here and to put up restrictive barriers against employing local people? Can he assure the House that his interpretation is shared by the German, French and Italian Governments?

Patrick McFadden: All the countries are signed up to the European posted workers directive. It is legal under the directive for a company to bid for work and to use its permanent employees as part of the fulfilment of that contract. That is not just a British right; it is part of the directive.

Points of Order

David Heath: On a point of order, Mr. Speaker. I am sure that hon. Members will have noticed today's inclement weather and the transport difficulties it has caused. We should be particularly mindful of the interests of those who work in the House, many of whom made great efforts to be here today and many of whom will have a very difficult journey home this evening. Accordingly, it might help if I notify the House that we intend to conclude our first debate at 6.30 pm this evening and the second debate at 9 pm to enable members of staff to get home safely.

Mr. Speaker: That is very considerate of the hon. Gentleman. The staff of this House have, under very difficult circumstances, come in to look after the House and to enable the Chamber to sit. I am glad that hon. Members are thinking of the staff. I note that the Adjournment debate is very tight and that no one other than the hon. Gentleman who will promote it will be able to contribute, with the exception of the Minister, of course.

Bernard Jenkin: On a point of order, Mr. Speaker. In your statement on 3 December at the state opening of Parliament, you said:
	"From now on, a warrant will always be required when a search...of a Member's office, or access to a Member's parliamentary papers, is sought."
	You went on to say:
	"Every case must be referred for my personal decision, as it is my responsibility."—[ Official Report, 3 December 2008; Vol. 485, c. 3.]
	However, in your statement made a week ago last Thursday you said that the police need only
	"advise the Serjeant at Arms"—[ Official Report, 22 January 2009; Vol. 486, c. 897.]
	and that the Serjeant at Arms would then approach the Member concerned directly. First, why have you changed your view, if you have changed your view? I believe that colleagues would be far more reassured by your first statement than by the subsequent one. Secondly, if it is ultimately to be left to the Member concerned to decide what to do in such circumstances, that might place them under undue pressure. Surely matters of privilege should rest with the House as a whole, according to the statement made by Speaker Lenthall in 1642.

Mr. Speaker: I am grateful to the hon. Gentleman for giving me notice of his point of order. In my statement on Thursday 22 January, I confirmed that, in relation to the visit to the office of the hon. Member for Shrewsbury and Atcham (Daniel Kawczynski), the police officer exercised no compulsory powers to enter the office or to require any document to be supplied. It was not a matter that involved the seeking of a search warrant. I also confirmed that, in future, any police officer in the House seeking the assistance of a Member and the staff in a Member's office must advise the Serjeant at Arms, who, in turn, will approach the Member concerned and obtain his or her consent before any action is taken. These requirements are separate from the procedure laid down in my protocol relating to circumstances in which the police seek to search a Member's office under a warrant.

David Davis: Further to that point of order, Mr. Speaker. I seek further clarification because my hon. Friend the Member for Ashford (Damian Green) has been approached by the Metropolitan police and asked for access to e-mails between him and me as Front Benchers of Her Majesty's loyal Opposition. Has the Serjeant at Arms been notified of this, and does it come under your ruling that such requests will require a warrant and will be referred to you for your personal decision?

Mr. Speaker: Is the right hon. Gentleman saying that, since the occasion on which the office of the hon. Member for Ashford (Damian Green) was searched, approaches have been made to the right hon. Gentleman and the hon. Gentleman to release certain information?

David Davis: That is exactly correct. I understand that a request has been made for electronic communications—e-mails—between me and my hon. Friend, presumably relating to the time when he worked under me on the Front Bench of the loyal Opposition.

Mr. Speaker: I thank the right hon. Gentleman for bringing this matter to my attention. This is news to me, and I will investigate whether the proper protocol and the procedures that I have laid down for situations without a warrant have been gone through. I will report back to the right hon. Gentleman and, indeed, the House.

William Cash: Further to that point of order, Mr. Speaker. In your statement, and in the protocol, there is reference to search warrants. Will you take advice on whether—as has been indicated to me—the Police and Criminal Evidence Act 1984, on which any search warrant might be based, applies to this House, for the reasons that have just been given? Will you confirm that this is a matter for the whole House and, furthermore, that the Police and Criminal Evidence Act does not apply and that a search warrant issued under that Act would be void and invalid?

Mr. Speaker: I will have to deal with that point of order in the same way; I will look into the matter and get back to the hon. Gentleman.

Peter Lilley: Further to that point of order, Mr. Speaker. I am glad that you are investigating this matter. When you have spoken to my hon. Friend the Member for Ashford (Damian Green), will you consider whether you and he should put in the public domain all the information that the police are requesting from Members' computers that relates to other Members of this House?

Mr. Speaker: The right hon. Gentleman knows that a resolution of this House says that, while criminal charges are proceeding, the matter should not be discussed— [ Interruption. ] Order. Mr. Penning, try not to do my job. We have just spoken a few minutes ago about how trade unionists should be trade unionists, and one thing that we do not do is try to do the Chairman's job for him when we are Back Benchers. I was saying that there is a resolution of the House that deals with criminal proceedings, and that I am bound by that resolution. That is the spirit in which I reply to the right hon. Member for Hitchin and Harpenden (Mr. Lilley).

Bernard Jenkin: Further to my original point of order, and to the subsequent comments that have been made, Mr. Speaker, I am grateful for your clarification. With the greatest respect, may I put it to you that there are people outside the House who do not attach sufficient importance to what you have said? Until the House has debated these matters, and referred them to the Privileges Committee for proper consideration before bringing them back to the House to be resolved, we are pulling our punches and the police are failing to respect your word. That is a serious slight on this House.

Mr. Speaker: My responsibility is to this House. What goes on outside the House is another matter.

Opposition Day
	 — 
	[3rd Allotted Day]

Government Capital Expenditure

Mr. Speaker: I inform the House that I have selected the amendments in the name of the Prime Minister for both debates.

Vincent Cable: I beg to move,
	That this House notes that the International Monetary Fund believes that the UK will suffer the worst economic contraction among advanced countries; notes with alarm that the Pre-Budget Report 2008 announced an effective 16.5 per cent. decrease in public sector net investment from 2012-13; further notes with concern that the Learning and Skills Council has decided to halt funding decisions for college rebuilding; expresses concern that there are currently 1.77 million people on the social housing waiting list, an increase of 100,000 on last year; further notes that only £400 million has been brought forward out of £8 billion to spend on social housing; notes how little investment the Government has made to ensure that homes are energy efficient and well-insulated; believes that the Government has neglected the current opportunity to invest in expanding the rail network; and calls on the Government to immediately bring forward funding for capital projects, particularly for schools, colleges, social housing, public transport and environmental works, all of which will create assets for the taxpayer and generate future income as well as countering recession in the short run.
	The ministerial statement set out the chilling context in which this debate takes place. We are dealing with rapidly rising unemployment, much of it centred on the construction industry, and the situation is bitter and divisive. We shall try to suggest a positive approach to the problem through fiscal stimulus from capital spending.
	I wish to make three simple points. First, fiscal stimulus is necessary, and the best way of providing it is through properly targeted public investment. Secondly, despite the Government's claim to be bringing forward capital investment, that is not happening. There are severe problems in the public investment area, and the situation is complicated by the virtually complete collapse of private finance initiative projects. Thirdly, if we are to have public investment in an environment where there are growing anxieties about public debt, we need a mechanism for proper evaluation of such things in a way that does not happen now, because much of it takes place in the framework of the commercial secrecy that surrounds PFI projects.
	Let me develop each of the points in turn. First, like most western Governments, we believe—and the Government say that they believe—in the need for a fiscal stimulus. Despite the severe financial constraints on the public sector, we believe that such a stimulus is right and necessary, and that the best way of bringing it about is through properly targeted public investment rather than, as has happened, the value added tax reduction. A few weeks ago, we proposed in the House that, assuming a belief in the fiscal stimulus, a much better use of that £12.5 billion would have been to introduce a series of public investment measures aimed at, for example, home insulation, social housing projects and public transport. We remain of the view that that would have been the correct way forward.
	Why is public investment so important in a recession? Partly because it creates employment. There is a big opportunity cost to the alternative of not investing: people remain unemployed. Some 100,000 construction workers have already been laid off in this recession. The figure was 300,000 at the peak of the last recession in the early 1990s, and there is a reasonable expectation that the number of unemployed construction workers in this recession will be even bigger than that.

Paul Burstow: My hon. Friend is talking about the absolute importance of fiscal stimulus through capital investment. Does he share my concern about local authorities that put together capital programmes which rely partly on anticipated receipts on capital sales and the disposal of assets? Such local authorities are finding it increasingly difficult to make their programmes add up, as the opportunities for disposing of assets at a reasonable price dry up because of the recession. Does he agree that if the Government want the economic stimulus and local councils to deliver better street lighting, and improvements in schools and various other assets that councils hold on the public's behalf, they need to find ways to bridge the funding gap to allow councils to make the capital investment today?

Vincent Cable: My hon. Friend makes a good point that I shall develop later. He is absolutely right that in the current environment trying to finance projects by selling off assets cheaply in highly depressed asset markets is not efficient, and that is one of the reasons why the Government's own programmes are in considerable difficulty.
	Let me finish my central point about the importance of public investment. Of course, it is important for employment generation, but it also generates an asset. If it is properly constructed, it generates a stream of income and environmental and social benefits. That is why we presented our series of proposals before Christmas.
	My second basic point is that, despite the Government's commitment in principle to accelerating public investment, a growing amount of evidence—anecdotal so far, but I hope that the Government will clarify the matter—shows that many of their enhanced public investment projects are not happening or are severely delayed. Let me enumerate some of the difficulties that we hear about from councils, parliamentary questions and elsewhere.
	In the middle of last week, we heard about the serious problems that are beginning to arise with the large capital works programme for further education colleges and adult colleges. Two in my constituency are affected. Twenty-two advanced projects have been put on hold and a long pipeline of more than 100 others has been put into abeyance. There may be good technical reasons for re-examining the projects—for example, some depend on asset disposal, as my hon. Friend the Member for Sutton and Cheam (Mr. Burstow) said. However, many do not. The adult college and the tertiary college in my constituency do not have that problem, or the other problems that are supposed to be associated with the building programme, and cannot understand why the projects are being held up. They say that they may have to retender. The process will take a long time—they will have to renegotiate bank loans, which will cause serious delay. Some of the colleges, which are being held up by what appears to be merely a three-month delay, say that it will retard construction by up to two years. When they come on stream, the recession may have passed, though perhaps that is an optimistic interpretation.

Annette Brooke: I visited Bournemouth and Poole college on Friday to learn that a project of £150 million had to be divided in two. Half has been deferred for at least 24 months and half is faced with general uncertainty. Does my hon. Friend believe that the Government should give a clear explanation for the hold-up and the possible waste of money for up-front expenditure, and a timeline for tackling that? My local college has already spent £11 million and it is faced with total uncertainty and antiquated buildings.

Vincent Cable: My hon. Friend makes her point well. Indeed, hon. Members of all parties made similar points last Thursday during Innovation, Universities and Skills questions. The problem is not only wasteful and exacerbates delays, but it affects a specific form of public investment, which, as the Government have demonstrated, is of great benefit. The colleges that have been built in the existing programme have produced quick returns in accelerating apprenticeship training and other useful activities.

John Hayes: The only explanation for the circumstances that the hon. Gentleman describes is either that the Learning and Skills Council overcommitted and led people to believe in an outcome that was never on the cards, or the Treasury has put a stop on the projects and blocked the pipeline. The cause of the problem was not clear from Innovation, Universities and Skills questions. Will he speculate on the answer?

Vincent Cable: I do not know the answer. The Financial Secretary is here and I am happy to take an intervention from him, but I am sure that he will give a proper explanation in his speech. Having talked to my local learning and skills council, I have a sense of Treasury involvement, but I do not know whether it is exclusively responsible.
	In addition to the problems that affect colleges, other bits of the advanced investment programme are running into difficulties. I was recently shown a summary of a meeting of council leaders in the south-west. It reported repeated appeals to the Department for Transport to say whether the advanced projects that the Government had flagged up would happen and simply never getting an answer. The projects are not moving ahead. If that is happening in the south-west, I am sure that it is happening everywhere else.
	There are particular problems with social housing. In the past year, my colleagues and I have asked the Government about the obvious things they can do in the face of the collapsing housing market, such as investing in social housing, both in new build and in acquiring unsold properties. The Government have responded in a general sense, but only very little is happening.
	The Government had approval, within the envelope of the spending review, to spend £1 billion on social housing. As far as we can establish, only a tiny fraction of that has been committed. One of the reasons is that public housing projects—social housing—whether undertaken by councils or by housing associations, depend on agreements with developers and section 106 money. Private development has largely ground to a halt and section 106 money is not available, so public sector housing is not proceeding either. We also know that many social landlords have collaborated with developers, and many of them overcommitted themselves with bank borrowing. There is about £50 billion of borrowing by social landlords—certainly by the registered social landlords. Many of them are now paralysed and unable to proceed with developments.
	The ambitious targets for social housing are not being met at a time of growing housing need. Moreover, in the middle of a recession, one of the things that the Government concretely can do, and which we all agree is an imperative, is simply not happening. I would be interested to hear exactly what is happening on that front. We have repeatedly asked the Government. As far as we can establish, virtually no money is coming out of the appropriate Department to develop social housing when it is most needed.

Nicholas Winterton: The hon. Gentleman is advancing a sound case. Does he believe that because of the seriousness of the credit crunch and the financial crisis, there should be more genuine co-operation, contact and communication between the Government and the Opposition parties, to see whether there could be co-operation in bringing about a solution to the extremely serious problems that we face?

Vincent Cable: I am certainly up for constructive discussions. I was last invited into the Treasury in October. I always welcome a good chat with the Chancellor, and I am sure it will happen.

Simon Hughes: Over the past couple of weeks, Ministers, including the Prime Minister, have accepted the case that my hon. Friend makes and the need to get things going in the social housing, housing association and housing trust sector. Will my hon. Friend seek to elicit from the Government today a commitment, first, to draw down more money from the new Homes and Communities Agency—it says that it has lots of money that it is willing to spend, and that could plug the gap—and, secondly, to call in local authorities with a large social housing programme that is currently blocked, so that the money can be released? The sites are there, planning permission has been granted, and there are people queuing up waiting for the homes. Something could be done if the Government gave the matter urgent attention.

Vincent Cable: The idea of getting the councils in to talk to the Government about what can be done is right. It should also be possible to bring in some of the developers and get them to work together. There should not necessarily be a public/private sector demarcation. My hon. Friend is right. Although I think the failings are largely in the Government, they are not entirely in the Government. The new agency is probably highly conservative in its approach. I get a sense that it is reluctant, for example, to encourage the buying up of empty stock because it says that it is the wrong quality and cannot be used for public sector housing, so housing stock just sits there empty when many people are desperate. There is a conservatism and a reluctance to act across the board. If my hon. Friend's suggestion is taken seriously, the Government should get all the parties round the table, bang their heads together and get some action.

Julia Goldsworthy: Does my hon. Friend agree that a key barrier preventing many councils from investing in more social house building is the continuance of the housing revenue account system? While that is under review, should not everything be done to bring forward the review, so that we can see changes sooner rather than later?

Vincent Cable: I very much agree. Until recently, the assumption was that only housing associations should do social housing, but of course councils have a key role in that, and they cannot perform it while such an archaic and irrelevant formula persists. My hon. Friend is right about that.

Danny Alexander: My hon. Friend is right about everything he says, but is he aware that in Scotland the situation has been made even worse by rule changes imposed by the Scottish Government which require housing associations to borrow much more money from the private sector, so causing small housing associations in rural areas to have to suspend their house building programmes in many cases? Does he agree that the Scottish Government, as well as the Westminster Government, should be making changes?

Vincent Cable: Unlike Treasury Ministers, the Scottish nationalists are not here to answer for themselves, but we shall take it that my hon. Friend's point is entirely correct.
	My final point on the way in which existing programmes are not working relates to the developing PFI crisis. In the past six months, only one PFI project—as it happens, the M80 motorway in Scotland—has been able to proceed. All others have ground to a halt, as I understand it. The Financial Secretary shakes his head; if he can encourage us with some good news, I would be delighted to hear it. The PFI process is in considerable difficulty because commercial partners will not come forward, and the number of banks willing to participate has drastically contracted, mainly because of the credit crunch. It was always a rather questionable financial mechanism, and it is now in the deepest difficulty.
	I have made several points about the difficulty that the Government are having in making capital investment take place. The problem is that the context is one of a crisis that is far worse than we knew it to be even three months ago. One of last week's revelations was the fairly clear indication from independent outside bodies, such as the International Monetary Fund, that the crisis in the UK is significantly worse than that of almost any other developed country. It is worth reflecting briefly on why that is the case.
	There are two major reasons why the British recession is likely to be much worse than in other developed countries. The first is that the bubble in the housing market and the growth of personal debt were more extreme than they were in almost any other developed country, except for Ireland and possibly Spain. The blame for that is quite widely distributed, but it is partly down to a failure of regulation: the deregulations of the 1980s and the liberation of the building societies that allowed them to become banks. It is partly due to failures by the Financial Services Authority, and partly due to a failure of monetary policy. Much of the responsibility for the failure to spot the bubble in the housing market lies with the Government, but also with irresponsible lending by the banking system. That was exceptional in the UK.
	The second reason, and the full significance of this point is only now becoming fully apparent, is that Britain will suffer severely because we are host to some of the world's largest banks. Of the largest five, three are in the UK, and they are ultimately the responsibility of the British taxpayer—not counting Lloyds HBOS, which is not far behind them. The City of London hosts those enormous, universal banks that are now in extreme difficulty, and the effects are rippling through our economy. That is happening because banks are rapidly—to use an ugly phrase—deleveraging, which is showing up in a contraction of credit to British companies, and because of the loss of revenue from the City on which the Government hitherto relied. A factor that has not yet come through, but which could be of enormous magnitude, is the big losses that the banks will accrue, much of which will end up with the Treasury. We do not know how much, but the amount will be large.
	The context of the debate is one in which we understand that the recession in Britain could be much worse than it is everywhere else. Therefore, Government action, including fiscal stimulus, is all the more important.

Andrew Tyrie: I wonder whether the hon. Gentleman could give us a clear indication of the size of the fiscal stimulus for this year, and the next two full years, if he thinks that it is appropriate to announce it at this stage. The automatic stabilisers constitute more than 80 per cent. of the current stimulus package, given the fall in tax revenues and the rise in public spending, and less than 20 per cent. of the package will come from measures in the Government's announcement.

Vincent Cable: Although £12 billion is a lot of money, the Government's fiscal stimulus is not large in terms of the British economy. It is less than 1 per cent. of the economy, which is a much smaller proportion than in the United States. We have supported that measure, but we suggested a different mechanism for going about it.
	A problem arises from the fact that we have growing budget deficits and growing public debt, which may have the effect of squeezing out any future public investment, which will be crucial in providing a continued fiscal stimulus.

Andrew Tyrie: The hon. Gentleman is very thoughtful on these subjects. Can he now say what is Liberal Democrat party policy? How big a fiscal stimulus is it recommending?

Vincent Cable: I do not think that that is the right way to approach the problem. There is a great difference between a public investment such as a stadium or sports arena, which provides no return, and a public investment in the form of, say, social housing, which generates a steady stream of income and is justified in economic terms.

Graham Stuart: How much?

Vincent Cable: Why have an artificial cap on sensible public investment that produces a return to society? It should be justifiable in its own terms. Capital rationing, which is the approach that Conservative Back Benchers seem to be advocating, is a narrow approach to a big problem, and that is completely wrong.

Rob Marris: I am intrigued by what the hon. Gentleman is saying. I think that there is a need to build hundreds of thousands of social housing units in the United Kingdom, to deal with the 30-year backlog. I also think that, in order to meet our climate change commitments, there is a need to insulate homes and so on, to which the motion refers. However, I understand him to have just said that if something is worthy, there should be no cap on it. That seems to be an extraordinary approach for a Government to take towards capital spending. Will he clarify that? If he agrees with me that we need, say, 1 million more social housing units, does he think that we should start building them immediately, with no capital caps? Is that what he is really saying?

Vincent Cable: The hon. Gentleman knows perfectly well that when the Treasury evaluates a project, it takes account of the scale of the problem and the amount of spare capacity available, and that affects the economics of the project. In recent years, the Government have made public investments amounting to something in the order of 2 to 3 per cent. of GDP. That is the order of magnitude that we are talking about. My concern is that that should continue, but the danger in the current budgetary crisis is that it will simply stop. My concern is how we create a mechanism to ensure that it continues.

Graham Stuart: For those of us who are less economically capable than the hon. Gentleman, can he give us a rough guide to how much money we are talking about, if we take his figure of 2 to 3 per cent.? He is not being tied to this figure, but to give us some idea of the scale that we are talking about, if we take the figure of 3 per cent., how much more is he suggesting that the Government should be spending?

Vincent Cable: I thought that I had just answered that. If we can sustain that level of public investment, it will be an important achievement in itself. The danger is that that investment will simply stop. If we look at what the Government have done in their public investment programme, we can see that they have brought investment forward; I think that the figures are £365 million for the current financial year—that probably will not happen—and £2.5 billion for the next financial year. After that they want a big cut of £3 billion in public investment in the following year. That assumes a short, minor recession, which seems utterly foolish in the current context.
	I want to ensure that a steady programme of public investment of the kind that the Government had built up, albeit artificially, in many cases through private finance initiatives, is sustained. I have given the hon. Gentleman an indication of the magnitudes that we are talking about. Many of those projects will be justified in any event by the economic returns—they will produce a return to the taxpayer. Those projects will, of course, be costly and involve public borrowing in the short run, but in many cases they will pay for themselves and reduce debt in the long term. That seems to be basic common sense. I am not sure why he is wrinkling his brow in such a confused way, because I think that I am making the point very simply.

Graham Stuart: I am just checking, but the hon. Gentleman seems to be suggesting that those public investments will provide a long-term return on expenditure by the Government, who are not going to be subsidising houses, but making a great profit on them. Can he clarify that?

Vincent Cable: There may be a subsidy, which of course has to be weighed against other elements of current spending, but that is a separate argument. However, good public investment may well produce a return for the taxpayer, which has to be factored into all our calculations. Anybody who has read about what the American Administration argue on public investment, and anybody who has looked back to the 1930s and the role that public investment played in hauling western economies out of that slump, would not have difficulty with the obvious point that I am trying to make.

Stephen Timms: I am listening with interest to what the hon. Gentleman is saying. He talked about the International Monetary Fund projections published last week. Of course, as he knows, another projection was published by the Institute for Fiscal Studies. It argued that the UK would avoid a long and protracted downturn, not least because of the effectiveness of the VAT cut. I wondered what he made of the arguments that the IFS set out.

Vincent Cable: I am baffled that the Minister—or, indeed, the IFS, if that is what it said—thinks that the VAT cut made a major difference to the UK economy, because it was less than 1 per cent. of GDP, and a substantial fraction of it flowed straight out to imports. I think that we all know, from the experiences of our local shopping centres, that much of it was completely lost. Most of that VAT cut finished up in increased margins for retailers, which of course has some kind of indirect economic consequence, but not very much. It is difficult to see how it could credibly be argued that the cut had a major impact in staving off recession; I simply do not believe it.

John Bercow: The motion before the House, and the hon. Gentleman's speech, are properly focused on capital expenditure through the public sector, but I hope that he agrees that that need not be to the exclusion, or even to the detriment, of means by which to stimulate effective consumer demand. In that context, and focusing at least in part on private expenditure, what view does he take on the merits of a marked increase in the national minimum wage to stimulate consumer expenditure, particularly among people on notably low incomes?

Vincent Cable: There are many ways of stimulating spending, and to be frank, the one that the hon. Gentleman suggests is probably the least helpful in the short run, for the simple reason that it would make it difficult for a lot of employers who are currently struggling to hold on to their labour force. As a general social objective, I support the principle of the minimum wage, and would like it to be improved, but I do not think that that would help us better than many of the mechanisms that I have described. What does have to happen is the expansion of credit; that, of course, is the key. This debate is not about the role of the banks and monetary policy, but that is the key element in reviving demand and spending. However, it is a debate for another day.

Christopher Huhne: Is my hon. Friend as astonished as I am at the surprise that Conservative and Labour Members are showing towards the principle that he is proposing, given that that principle is put into practice by the most fiscally conservative Government in Europe, namely the German Government, who call it the golden rule? Matching borrowing with capital spending is a sound principle of public finance.

Vincent Cable: That is certainly right, and of course although the Germans were prayed in aid a few weeks ago in arguments against stimulating the economy, they have done exactly that—stimulated their economy—and have done so very much along the lines that we advocate.

Richard Younger-Ross: Does my hon. Friend agree that if some long-overdue infrastructure projects, such as the dualling of sections of the A303 and the Kingskerswell bypass, were brought forward, it would not only create employment in construction and subsidiary industries, but benefit the south-west economy in the long term?

Vincent Cable: My colleague will have heard me say a few moments ago that the south-west councils have already expressed frustration at the fact that earmarked road projects, perhaps including the one that my hon. Friend mentions, were not proceeding as the Government said they would. I am sure that that is part of the problem.

Andrew Love: I have some sympathy for the argument that if shifting forward investment creates a problem a year or two on, that gap ought to be filled, but of course the classic argument in opposition to that is that a further build-up of debt will bring into focus the value of the currency. The hon. Gentleman refers to the United States, but its currency is, of course, the reserve currency, and is somewhat protected. Are there any concerns among Liberal Democrat Members about the possibility that our currency might be threatened?

Vincent Cable: Of course, any responsible person has to worry about that risk, which, although probably not large, certainly exists. I am surprised that the hon. Gentleman is reinforcing the rather hysterical approach taken by the Conservatives, who think we are on the edge of a major currency collapse and all that will follow from it. Nevertheless, that risk has to be taken into account.
	To answer the hon. Gentleman's question and to put the British financial position into context, we started the recession with the Government in a position where public debt was about 40 per cent. of gross domestic product—we can argue about whether they were concealing one or two percentage points, but it was of that order of magnitude and it was less than the figure for the United States, Germany or France. I am always happy to concede that. The worry is that public debt is growing very rapidly and that within two to three years it may well have reached 60 per cent., by which time other developed countries will also have increased their public debt as a share of GDP.
	It is worth while putting that in the wider context and considering the extreme cases, such as those of Italy and Japan. As far as I am aware, Japan has not had a currency crisis, yet it has public debt of well over 100 per cent. of GDP. It finances that comfortably by patriotic saving on the part of the Japanese and their lending their money to the Government. Its high levels of debt are way beyond what we are currently contemplating and do not, by any means, necessarily create the kind of problems that some hon. Members are worrying about, but clearly we must be cautious. That is why any public investment programme has to be carried out in a disciplined way.
	The problem relating to public debt arises not from excessive public investment, but from the fact that over the next two to three years the expected deficit will be very large compared with other western countries—8 to 10 per cent. of GDP is the relevant figure and it is a major worry. This situation is partly to do with the cycle and partly to do with a structural deficit, and it has emerged partly because of the collapse in the housing market and the revenue associated with it, and partly because of the collapse in the City and the revenue associated with that. The Government, the Conservatives and the Lib Dems—all of us—will have to face the fact that over the long term there is a structural deficit problem that will have to be dealt with, come what may. It is fair to say that none of us have yet come up with a convincing explanation of how that structural deficit will have to be addressed, but that is the nature of the problem—it is not, by any means, about excessive public investment.

Kelvin Hopkins: Deficits have two factors: spending and income. Our problem has been a failure to collect the taxes that were due and because we have a very low level of tax on the rich—we have tax concessions to the rich. If we just collected a little more tax, we could afford to spend more. Taking such an approach might move us a little in the direction of Sweden—a successful economy that has a much higher tax-take and a much higher level of public spending—and we could live in a much more civilised society.

Vincent Cable: If the hon. Gentleman reads my article tomorrow morning in his favourite newspaper, he will discover that we deal with tax havens —[Interruption.] Not the  Morning Star.
	To round off my comments, I acknowledge, as has been pointed out clearly in interventions, that we operate in an environment in which, although the British public finances are not in quite the desperate state that they are sometimes portrayed to be, there is a legitimate source of anxiety. Therefore, any public investment cannot be undertaken indiscriminately; it must be very carefully vetted. At the moment, we have no mechanism for doing that, because public investment has largely been undertaken through private finance initiative projects, which are subject to commercial confidentiality. Through the Public Accounts Committee we know very approximately and many years later whether such projects were good or bad ones, but there is no system for assessing in advance, publicly and openly, what are good projects and what are bad projects. We have to set such a system in train.

Andrew Love: Siren voices are coming from Europe suggesting that adopting the euro might be a fit and proper decision to take at the current time. Can the hon. Gentleman reassure us that that is not the official position of the Liberal Democrats?

Vincent Cable: I do not think that the hon. Gentleman will find any of those siren voices on the Liberal Democrat Benches. We have very carefully stated our position; our leader wrote an excellent article in another broadsheet last week explaining precisely how the joining the euro now should be opposed. We remain in favour of the principle, because we think it would be good for the British economy, but the worst possible time to make such a move is in the middle of a major financial crisis, in an environment of panic. We think it quite likely that after two or three years in which the weaknesses of the British economy have been brutally exposed, people in this country will consider the matter in a fresh and more positive way, but that debate remains to be had.
	We have a very serious recession, much worse than we believed we were likely to have and almost certainly much worse than in other developed countries, and the Government will have to play a major role in countering it. Public investment has a key role, and we have set out a series of proposals on social housing, transport and environmental projects to fulfil it. The public need to be given hope that we are getting through this recession, and such investment is one of the best ways in which the Government can do that. We are seriously concerned that because of drift, difficulties with PFI and other problems, that is simply not happening.

Stephen Timms: I beg to move an amendment, to leave out from "House" to end and add:
	"notes the substantial investment over the last decade in frontline public services in every region of the country; notes that the Government paid down debt over the last 10 years, reducing it from 42.5 per cent. to 36 per cent. of GDP over the last economic cycle, before the global credit crunch hit Britain; further notes that public sector net investment was only 0.6 per cent. of GDP in 1997-98 but was 2.1 per cent. of GDP by 2007-08, supporting sustained increases in investment in schools, hospitals and other key public services; welcomes the action the Government has taken in response to the international financial crisis both to support financial stability and to provide help for people and businesses at the time when they need it most; notes that to support the economy in the short term the Government's fiscal stimulus includes public sector net investment rising to 2.7 per cent. of GDP by 2009-10 and a value added tax cut putting over £12 billion into the economy throughout 2009; further notes the Pre-Budget Report 2008 measures to bring forward £3 billion of capital investment from 2010-11 to 2008-09 and 2009-10 which will support a number of different industries and jobs and directly improve key public services including schools, transport projects and social housing; welcomes the Government's commitment to ensuring that the overall level of capital spending is sustainable and protects investment in public services; and believes that action now to support the economy will enable Britain to take advantage of Opportunities arising as global growth resumes."
	I shall disagree with a number of points that the hon. Member for Twickenham (Dr. Cable) has just made, but I welcome his thoughtful and interesting contribution to the debate.
	When the Government came to office in 1997, we put in place a fiscal framework to bring some much-needed discipline to the public finances. The robust new framework that we introduced was extremely effective. Public debt fell from 42.5 per cent. in 1996-97 to 36 per cent. in 2006-07, as the hon. Gentleman acknowledged. That meant, for example, that when we received more than £20 billion from auctioning licences for third-generation mobile phone services in 2000, we used the proceeds to pay down debt. The Nobel prize-winning economist Joseph Stiglitz said when I was on "Newsnight" with him last Wednesday:
	"We look at Britain as an example, in times in which the economy was good you did the right thing."

Andrew Tyrie: The right hon. Gentleman began by saying that Labour brought in fiscal rules to introduce fiscal discipline and sort out the public finances. Can he name any serious commentator who believes that the fiscal rules are any longer worth the paper that they are written on?

Hon. Members: Stiglitz.

Stephen Timms: Indeed, I have just named Joseph Stiglitz, who made the point that Britain did the right thing when the economy was good, thanks to the rules and framework that we introduced in 1997. That fiscal responsibility explains why we can afford to borrow more now to support our economy through these difficult times.

Mark Hendrick: My right hon. Friend will be aware that Joseph Stiglitz chairs a UN commission looking into the financial needs of many developing countries. One thing that it has said is that the depreciation of sterling and other currencies is having a big impact on the amount of aid that we can give the developing world. We know what is happening in Africa, Gaza and elsewhere, so is there not a strong case for revisiting our commitment to development aid?

Stephen Timms: We must certainly reflect on the interests of developing countries and the developments within them, and we will do that in the G20 discussions leading up to the summit in London in April. It is clear that the downturn is affecting not just developed countries but developing ones, and some investment is being withdrawn from developing countries. We need to consider that matter.

David Gauke: The Minister has boasted about the Government's record on public finances since 1997. Is he aware of the quotation from the Institute for Fiscal Studies last week? It states:
	"Labour entered the crisis with one of the largest structural budget deficits in the industrial world and a bigger debt than most OECD countries, having done less to reduce debt and—in particular—borrowing than most since 1997."

Stephen Timms: I hope that the hon. Gentleman also noticed what the IFS said about the effectiveness of the VAT cut as a stimulus to the economy. When he or the hon. Member for Runnymede and Weybridge (Mr. Hammond) speak later in the debate, as I hope they will, I would welcome clarification of their view about the fiscal stimulus that has been announced in the USA. The shadow Chief Secretary, the hon. Member for Runnymede and Weybridge, told us in a debate a couple of weeks ago that there was an emerging consensus that there should be no fiscal stimulus in circumstances such as ours when there is a deficit. He will by now have noticed that this emerging consensus does not extend to the incoming US Administration. As the hon. Member for Twickenham rightly said, the US has higher debt than us and a larger deficit, and it is planning a larger fiscal stimulus. It would be very helpful if the Conservative Opposition could confirm to us their apparent view that there is a consensus that President Obama should abandon the central economic policy proposal he has put to the American people. This underlines just how isolated and out of touch the Conservative party is.

Graham Stuart: Will the Minister give way?

Stephen Timms: I will gladly give way to the hon. Gentleman in a few moments, after I have made a little progress.
	At the same time as reducing our public debt, as we did, the fiscal framework has allowed us to protect public investment. The last Conservative Government allowed public investment to shrivel: it hit a low of 0.3 per cent. of GDP in 1988, and in 1996-97—the last year for which they were responsible—it was just 0.6 per cent. That abysmal record of under-investment left a legacy of decaying public services and infrastructure that every Member of this House will remember all too clearly in their own area.

Rob Marris: Does my right hon. Friend also recall that under the last Conservative Government of 1992-97, with their woeful investment record to which he has just referred, the national debt doubled, and that this Government started to pay that down? Can he also tell us what are the accumulated national debts as a proportion of GDP of other leading industrialised countries, compared with that of the United Kingdom?

Stephen Timms: My hon. Friend is absolutely right, of course, and I can tell him that every G7 country apart from Canada has a higher level of net debt as a proportion of GDP than us, and that our level is therefore comparatively low and puts us in a very good position for taking the measures we now need to take.
	Under this Government, investment has grown by more than three times the 1997 level, to 2.1 per cent. of GDP this year. Next year, at 2.7 per cent. of GDP, public investment will be at a higher level than at any time in the last 30 years.

Christopher Huhne: Given the case the Minister is making, is he as concerned as I am that the net worth of the UK public sector—not just the debt position, but that taken together with the asset position—is very much lower today than it has been historically, and that that deterioration has taken place under both his Government and the Conservatives?

Stephen Timms: I am not sure what data the hon. Gentleman is referring to, but I can tell him that sustained investment over a long period has enabled us to repair a lot of the damage caused to schools, hospitals, transport and other national infrastructure. In the health service, for example, in 1997 half of NHS buildings predated the national health service; that proportion is now down to 20 per cent. I therefore think the statistic the hon. Gentleman cited is a bit misleading.

Paul Burstow: Will the right hon. Gentleman respond to a question I earlier asked my hon. Friend the Member for Twickenham (Dr. Cable) about the difficulty local authorities face in financing their capital programmes? In making good at the local level— through investment in their housing stock and schools—the damage that the right hon. Gentleman is talking about, how can they now bridge the gap caused by their not being able to realise receipts? My local authority is partly funding its programme from £12 million of receipts that it now does not anticipate will come about.

Stephen Timms: I will come to that point. There certainly is a challenging market environment for private finance initiative deals at present, but a number of them have been agreed recently; I am thinking of the Forest Gate housing project in my own area, for example—which was, I think, agreed last week—and Building Schools for the Future projects, and not only of the project to which the hon. Gentleman referred.
	We have been able to put right a lot of the damage caused by previous years of chronic under-investment. Today, we are in a recession—the first to hit the UK since the early 1990s and face some of the harshest economic conditions for decades, and perhaps for a century. The nature of this downturn is fundamentally different from those the UK suffered in the past. In the late 1980s, UK GDP growth was allowed to rise to 6 per cent., well above the economy's growth potential. As a result inflation rose to double digits and interest rates followed in an effort to control inflation. Domestic policy mistakes caused the economy to enter recession in 1990 and unemployment to rise above 3 million for the second time in 10 years.
	Today, things are very different. The problem we face is global, with many forecasters now expecting the world economy to contract for the first time since the second world war. Bad decisions at the heart of the international financial system have meant banks losing confidence in each other and, therefore, global credit markets to freeze up.

Graham Stuart: Does the Minister share my view that the Prime Minister was wrong to suggest that the UK was uniquely well placed to deal with a recession, especially in light of the IMF's damning judgment last week that this year the country would have the greatest reduction in GDP of any of the major developed countries?

Stephen Timms: No. I agree with the Prime Minister's assessment and there are two reasons: first, as we have already discovered in this debate, we go into the recession with a low level of debt compared with other G7 countries and, secondly, we go in with a high level of employment; indeed, for several months last year more people in the UK were working than ever before. We have gone into the recession in good shape but the effects of the downturn are now being felt everywhere around the world. Trade and manufacturing have contracted sharply in America, Europe and Asia as companies have been unable to access the credit they need, so economic forecasts for growth in 2009 have been revised sharply downwards.

Richard Younger-Ross: The Minister is exactly right in his point that the circumstance is unique and that the recession is being felt not just in the UK but in Europe and America. In the downturns of the 1980s and 1990s, the construction industry was able to take some work abroad; people moved abroad—for example, lift manufacturers took projects abroad—but at present, they are unable to do so. Does that not mean that there is greater need for investment in construction projects and the construction industry to mitigate this special and—for the construction industry—very deep downturn?

Stephen Timms: I largely agree, which is why we have taken the measures that I shall be setting out in a moment, although there are still opportunities overseas—in China, for example. We have been talking with Premier Wen today about the Chinese economy, which will grow significantly in the coming year, although not at as high a rate as in recent years.

Andrew Tyrie: The right hon. Gentleman is being very generous in giving way. If I heard him correctly, I think he said that Britain now faces an economic crisis that is perhaps the worst for a century. Is he suggesting that what we may be facing is worse than the great depression of the 1930s?

Stephen Timms: I am suggesting that the world economy is facing a situation that is certainly the worst in decades—looking at the world as a whole—and some people are saying that it is the worst for a century.

Rob Marris: Will my right hon. Friend take this opportunity, verbally, to give the bankers a kicking? Around the world, they have caused hundreds of thousands, if not millions, of people to lose their jobs and there is general recognition that, very sadly, that situation will get worse. The bankers, some of whom are now fortunately former bankers, have created a terrible situation, so will my right hon. Friend give them a verbal kicking instead of—as politicians too often do—letting those charlatans and mountebanks off the hook?

Stephen Timms: My hon. Friend may have heard me refer to bad decisions at the heart of the international financial system, which I think is an accurate account of what happens. I very much sympathise with the point he makes.
	Key to solving the global problem will be a global response. Working with international partners, we are taking a leading role in developing, agreeing and delivering that global response. As I said, the Chinese Premier is in London today and the Prime Minister and other Ministers are in regular contact with leaders around the world. We took a leading role in the G7 autumn discussions in Washington and the five-point action plan produced there was largely based on the UK's then recently implemented financial stability measures. Both the Prime Minister and the Chancellor were at the Washington summit in mid-November. We hold the G20 presidency this year, and it is increasingly recognised, as Stephen Green of HSBC was saying last week, that the G20, in bringing together the biggest developing as well as developed countries, is the right group of nations to bring together to formulate solutions. My hon. Friend the Member for Preston (Mr. Hendrick) rightly expressed concerns earlier about developing countries, which underlines the importance of the G20. Through our presidency, we are driving an ambitious work plan to help tackle the problems.
	The Prime Minister presented a paper to the European Council in October, outlining five key principles to improve regulation and supervision, and setting out reform of the International Monetary Fund and the World Bank. We know that there are major lessons to be learned there. It is clear that existing international systems of regulation failed to adapt to the challenges of this new, highly globalised world; we need to co-operate internationally to make major changes so that those mistakes cannot be repeated.
	International action needs to be accompanied by a decisive domestic response. Our response has been threefold. First, we had the comprehensive package of support for the banking system announced in October, which has been widely replicated around the world since. Secondly, there were announcements in the pre-Budget report of a major fiscal stimulus package to support the wider economy; the measures we are discussing today are an important part of that—and I shall say more about it in a few moments. Thirdly, there was a package of measures last month to begin to replace the lending capacity lost by the withdrawal from the UK of foreign banks and other institutions and to address the barriers preventing UK banks from expanding lending, to support stability and to restore certainty in the banking sector.

Christopher Huhne: I am very supportive of the fiscal stimulus, but one issue greatly concerns me—the slimness of the evidence of whether anything is actually happening on the ground. Let me provide the example of two projects in my own constituency, both of which are Barratt developments that have now been mothballed. They could be picked up and got going; they could employ construction workers immediately by building flats that were initially aimed at the private sector, but could be brought into social housing. That could be got going immediately. Why is the Treasury not getting the biggest four or five developers together in a room and actually doing a deal with them to proceed with those sort of projects? Why do we not get some action on the ground?

Stephen Timms: Some resources—a substantial sum—have been allocated to the agency to enable it to take forward purchases of that kind.
	Let me set out the measures that we are taking. Of course, the global, macro-economic action that I have described takes time to benefit the firms and individuals being hit. That is why we are taking action now with the business payment support scheme to allow firms to spread tax payments over a timetable they can manage. More than 34,000 businesses have reached agreements since that was announced at the time of the PBR. We have provided extra capacity for Jobcentre Plus; we have expanded schemes to enable those losing their jobs to stay in their homes with support for their mortgage repayments; and there is also the VAT cut. I very much welcome what the Institute for Fiscal Studies said last week about the effectiveness of that as a stimulus measure. I think that the mistake of the hon. Member for Twickenham is his apparent belief that the effectiveness of the VAT measure is about what happened in the past, but I think that the measure will, as the IFS pointed out, prove increasingly effective as the year progresses and as the subsequent increase back up to the original rate approaches on 31 December.
	We are increasing household income next year by putting an extra £145 in the pocket of every basic rate taxpayer; we have given all pensioners a bonus £60 one- off payment, and the basic state pension for a single person is going up very sharply from £90.70 to more than £95 a week in April. We are supporting families by permanently increasing child benefit to £20 a week with effect from last month instead of April, and we are increasing child tax credit by £75 a year in April, which is above inflation. So, unlike the Conservative party, we agree with the Governments of every major economy in the world who are increasing public spending now. I agree with the hon. Member for Twickenham that bringing forward major capital spending on our national infrastructure is a vital way to preserve jobs and boost our economy through this period.

Derek Twigg: On new projects, it is obviously important to get projects moving as quickly as possible for the next year or so, but there are some huge capital projects around, particularly the Mersey Gateway bridge, which is in my constituency, worth some £700 million and might be ready in the next two or three years, following a public inquiry this year. Does my right hon. Friend agree that it is important not only to get projects on the move this year, but to plan for the next two or three years? A project of that size— £700 million—will provide thousands of new jobs and stimulate the local economy in Cheshire, Merseyside and the whole north-west.

Stephen Timms: Indeed, and I think that the total amount of transport investment being brought forward is about £700 million—a substantial contribution, with the kind of benefits that my hon. Friend describes. We have brought forward a total of £3 billion-worth of capital projects on housing repairs and insulation, school extensions, health centre refurbishments and transport improvements to provide jobs now, when the economy is under pressure, and to improve services.

Bob Russell: The debate is about capital expenditure during the recession. Does the right hon. Gentleman agree that, when we consider existing public assets, we should be looking for renovation and restoration before demolition and new build? Surely, the existing capital could be spread further to get more projects not by destroying what we already have, but by restoring and renovating it.

Stephen Timms: It depends on the circumstances. Certainly, there is a big commitment in the programme for housing repairs and refurbishment—for example, under the decent homes programme—but new build is needed elsewhere.

Joan Walley: Will my right hon. Friend tell the House a little bit about how the Treasury is working with other Departments, the Cabinet Office and regional Ministers to make sure that, where it is urgent to ensure that the capacity exists to pursue capital projects in different regions—as in north Staffordshire and Stoke-on-Trent, as I am sure he knows—we can do so quickly? He can ensure that we have a joined-up government approach to make sure that, for example, investment in new sixth-form colleges, social housing and so on goes ahead as quickly as possible.

Stephen Timms: My hon. Friend is absolutely right about the importance of the Treasury and all the Departments affected working together, and we are doing so through the National Economic Council and the regional economic councils, and by enabling Departments to look at such issues in the round, exactly as she says.
	Let me pick up the issues raised by the hon. Member for Twickenham in the motion and in his speech. First, there simply is no freeze on the capital funding programme for further education colleges. Investment in college capital projects will amount to £2.3 billion between 2007-8 and 2010-11. That programme is steaming ahead. Incidentally, the equivalent programme in 1997 was zero—there was no capital investment at all in FE in 1997. More than 250 projects are under way, funded by the Learning and Skills Council, helped by the recent decision to accelerate £110 million in the current year from future budgets to help beat the downturn; 154 of those projects are due for completion this year. There has been some disappointment that a number of projects have not gone ahead as quickly as was hoped, but the programme is proceeding on precisely the scale that we said that it would, with a very large number of colleges benefiting as a result.

Julia Goldsworthy: In an earlier intervention, co-operation between the Treasury and other Departments was mentioned. What co-operation was there between the Treasury and the Department for Communities and Local Government, which vetoed any English region from applying for extensions that would have brought in an extra £671 million-worth of EU funding? Why were the regions not allowed a say on that? Was the Treasury involved in that decision?

Stephen Timms: I am not sure which programme the hon. Lady means. If she will drop me a line, I shall be happy to tell her what happened in that specific instance. I can assure her, however, that we are working very closely with all the spending Departments. In the case of the Department for Communities and Local Government, it is true that there is pressure on social housing, but we have set ambitious targets to increase provision, and over the next three years we are investing about £6.5 billion to deliver on those targets. That will include acquired and refurbished homes as well as newly built ones.
	We have taken major steps to guarantee that homes are energy-efficient and well insulated. Since 2000 the Warm Front programme has helped more than 1.7 million households, and the £50 million that is being brought forward from the year after next to next year following the announcement in the pre-Budget report will improve energy efficiency and heating in some 20,000 homes. The Warm Front programme will provide 112,000 insulation measures this year, and another 108,000 next year.

Mark Hendrick: I join my right hon. Friend in congratulating Eaga Partnership on the excellent performance of the Warm Front programme, from which 7,000 homes in my constituency have benefited, but may I return him to the subject of capital expenditure on colleges? As he may know, the principals of Lancashire colleges visited Westminster last week. They are anxious for the Learning and Skills Council to release money quickly for many capital projects that are currently being held up. People are being asked to leave building sites and architects are being asked to stop works because of the delay, and those principals are very concerned about the impact that that will have.

Stephen Timms: As my hon. Friend knows, our right hon. Friend the Secretary of State for Innovation, Universities and Skills has commented on the issue. I know that some projects have not proceeded as quickly as was hoped, but the programme is going ahead on precisely the scale that we predicted: a great many projects are proceeding.

Alistair Burt: The Minister must be careful in his choice of words. He is giving the impression that the hold-ups experienced by schools and colleges such as Sharnbrook community college in my constituency, which was told at Christmas that there was a freeze on capital decisions by the LSC, in some way constitute a planned freeze, and that everything is, in his words, steaming along. In common-sense terms, what he has described, what has happened in my constituency and what others have mentioned is a freeze. Perhaps he could explain the distinction between a freeze—which is what everyone thinks is going on—and steaming ahead.

Stephen Timms: I think we have all had some experience of what a freeze is like today!
	As I said, a great many projects are going ahead; there are 250 altogether, of which more than 150 will be completed this year. It is true that some proposed projects have not been given the go-ahead because the resources available have been committed to projects that are going ahead, but it is not the case that the programme has been frozen. It is going ahead, and a large number of colleges will benefit as a result.
	On the rail network, £10 billion has been committed to enhancing capacity between 2009 and 2014. Overall Government support for the railway over that period will be more than £15 billion. My right hon. Friend the Chancellor announced in the pre-Budget report that we would provide £300 million for the purchase of new rolling stock. The contract for those new carriages will be awarded by April this year, and the stock will be in place from 2011. I therefore hope that the House will accept that the true picture is very different from the one sketched in the Liberal Democrat motion.

Annette Brooke: I am grateful for the news that many projects are being brought forward, but why are further education projects being frozen when college principals had felt that they were well down the line towards full approval, and vast sums had already been invested? College principals need to know the time line for decision making, and the Treasury has a role to play in that.

Stephen Timms: As the hon. Lady knows, Andrew Foster has been brought in to look at those issues and he will report as soon as he is able to do so.
	The Liberal Democrat motion is also wrong to criticise the fact that we have set out in our plans a fiscal consolidation in the period ahead. We have set out how we will get back to balance in the medium term, and I make no apology for that. We need to get back to balance and to set out plainly how we will do that. Indeed, that is what we did in the pre-Budget Report. I think that we are the only country to have set out the trajectory that we will follow to do that, and it is the right thing to do. It will involve, when the upturn comes, a level of public sector net investment that will be lower as a proportion of GDP than it will be next year—but at 1.8 per cent. of GDP it will still be three times as big as in 1997.

Andrew Love: My right hon. Friend mentioned the upturn and when it will come. The recent evidence from the IMF and other forecasters is that the recession may last longer. If the recession is likely to last longer than until the end of this calendar year, will Ministers, when they make the Budget projections, consider putting in place a further fiscal stimulus and bringing forward investment so that we do not have a deeper recession than is necessary?

Stephen Timms: As my hon. Friend knows, we will set out new forecasts at the time of the Budget, and of course we will reflect on the lessons from them. However, the IMF forecast is for growth for the UK for the next calendar year. Interestingly, it also forecasts a shorter period of negative growth for this country than for several other G7 countries.
	As I was saying, our increase in public investment compared with the Tory years will be sustained not just through the current downturn but through to the other side of it as well. Of course, paying for the fiscal stimulus, and for the steps that we are taking to support British businesses and households, will require Government borrowing to increase. We are starting from a strong position. According to the OECD, the UK had the lowest net debt of any country in the G7 apart from Canada—the point that Joseph Stiglitz rightly underlined on "Newsnight". That is the point that the Conservatives have failed to recognise. It would be helpful if the hon. Member for South-West Hertfordshire (Mr. Gauke) confirmed, when he speaks later on behalf of the Conservative party, whether it is his party's view that President Obama should abandon his central economic policy proposal because of what they think is an emerging consensus, although it does not even appear to be a consensus in the shadow Cabinet, given some of the remarks that have been made by its members.
	Of course debt in the UK will rise in the period ahead, as it will rise in the other major economies. Every advanced country in the world is increasing Government borrowing in response to the downturn. The latest OECD forecast shows not only that UK net debt was the second lowest in the G7 when the shocks began, however, but that our net debt will remain below that of most other G7 countries right the way through this downturn.
	Some hon. Members would have us believe that we cannot afford to take measures to counter the effects of the global downturn in Britain. Their view is that we should do nothing, let the recession run its course and turn our backs, as the Tories did with such disastrous results in the recession of the early 1990s. We strongly disagree. Because of our responsible handling of public finances over the past decade, we can act now to preserve British jobs and boost our economy. These steps will ensure that Britain comes through the global downturn sooner and stronger than would otherwise be the case.
	As the Institute for Fiscal Studies said last week, the cost of doing nothing would be greater than the cost of acting. Others in the House have today urged us to spend more—in effect, to throw sustainability in the public finances to the winds. We are not going to do that either. We will always live within our means. In that way, we will navigate a path that gets Britain through in the best possible shape. We will do that in a way that is fair to everyone, and make sure that we are in a position to grow again when the new opportunities of the upturn emerge in due course.

David Gauke: It is a pleasure to speak in this debate. The Liberal Democrats have proposed an interesting motion, which is very helpful to the House in one sense—it highlights an inconsistency in the Government's approach. We hear how the Government are engaging in a fiscal stimulus through public works and additional spending to help people out of the recession, but almost daily we read that public expenditure is being held back and that capital projects have been cut. A number of those points have been raised today by hon. Members, including by the hon. Member for Twickenham (Dr. Cable).
	The Minister, in a carefully worded response, stated that 250 further education college projects are under way and that there is some disappointment about what is going forward. However, it appears that there is a freeze on new projects, and that is the reality that Members are finding in their constituencies. It has not been made up—we are hearing about it, our constituents are telling us about it daily. We see frequent newspaper reports of PFI projects being put on hold.  The Times tells us that more than 100 school and hospital projects are being delayed. The Government have announced that many of the proposals, such as the widening of the M25, are to be held back for budgetary reasons.
	We know that there is a crisis in social housing. It is a long-standing fact that less social housing has been built in every year of this Labour Government than was built in every year under the last Conservative Government and that the number of households on local authority waiting lists for social housing has increased from 1 million to 1.8 million.
	The Government say that they are trying to spend their way out of a recession, but in reality they faced the difficulty of the unsustainable nature of their public finances, and they are unable to deliver. I am grateful to the Liberal Democrats for highlighting that point. However, we are not entirely sympathetic with the Liberal Democrat policy that underlies the motion, which is to try to deal with the recession through expenditure on public works. I think that that was essentially what the hon. Member for Twickenham outlined.

Bob Russell: Irrespective of the merits of capital expenditure, does the hon. Gentleman agree that if there is to be public expenditure, in order to get value for money and to spread the money to as many projects as possible, renovation and restoration of the existing capital plant owned by the public should be considered before demolition and rebuilding?

David Gauke: There is always an argument for considering existing infrastructure and not demolishing it if it would be more worth while to keep it. That is a truism and I will not disagree with it.
	It might be worth highlighting the evolution, to put it kindly, of the Liberal Democrats' policy. It is now their policy that the country needs more spending and that that is the way to get out of the recession. Last May, the leader of the Liberal Democrats stated that they would
	"focus all our attention on cutting taxes"
	and that
	"We must get away from the Labour notion that if the Government is spending more it must be doing better."
	In his September 2008 party conference speech, the hon. Member for Twickenham, said that there was now
	"a mood of austerity"
	and
	"an intolerance of...binge spending by government".
	As recently as 10 November 2008, in another Opposition day debate on the economy, the Liberal Democrat motion set out a number of measures that the country required, but nowhere within it was there a proposal for a large, unfunded fiscal stimulus to be spent on public works.

Lynne Featherstone: Does the hon. Gentleman not agree that binge spending on identity cards would be a waste of Government spending?

David Gauke: Yes, I do agree with the hon. Lady, and if the Liberal Democrats' policy is simply to identify wasteful spending, I am certainly with her. We welcome the Liberal Democrats to that cause.
	In the debate on 10 November, the hon. Member for Twickenham made a thoughtful and interesting speech, as always, and, to be fair, he addressed the greater need to free up local authorities to expand their social housing. However, he argued against a large fiscal stimulus, initially in the context of tax cuts, saying:
	"There are dangers in doing what I believe the Government propose, which is to have an unfunded tax cut, which I understand would be financed by Government borrowing. However, Government borrowing ultimately has to be paid for—it is deferred taxation or inflation, and that is not a satisfactory way forward either."
	We would certainly agree with that. The hon. Gentleman concluded by saying:
	"We need a stimulus that will be funded".
	The hon. Gentleman's colleague, the hon. Member for Taunton (Mr. Browne), taunted the Conservatives for being a high-spending party, saying:
	"You do not have to remain trapped in the high-tax, wasteful spending box into which your shadow Chancellor has locked you".—[ Official Report, 10 November 2008; Vol. 482, c. 499, 543.]
	However, only a few weeks later, the Liberal Democrats are calling for higher spending, and are not calling for any tax cuts.

Christopher Huhne: The hon. Gentleman is describing the evolution of our policy over a period that has seen a dramatic worsening of the economic outlook, not only in this country but more broadly. The great Liberal, Lord Keynes, pointed out that, when circumstances changed, he changed his mind. Sadly, that does not seem to be true of the Conservatives, who always seem to say the same, regardless of the circumstances.

David Gauke: I am grateful to the hon. Gentleman for noting our consistency. I have to say that there has been a pretty dramatic change since 10 November, and I remind the House that, during the debate from which I quoted, the hon. Member for Twickenham said:
	"Government borrowing ultimately has to be paid for—it is deferred taxation or inflation, and that is not a satisfactory way forward either."
	We share that view. I think that the hon. Gentleman shares that view in the context of tax cuts, but not in the context of public works.

Vincent Cable: Has the hon. Gentleman not yet understood the central point that lies behind the interventions by all western Governments—namely, that if people are unproductively unemployed and out of work, instead of being productively employed in public investment, that itself constitutes an unfunded public spending commitment? We are concerned with the alternative, which is that resources remain unemployed.

David Gauke: The hon. Gentleman is making the Keynesian, expansionary argument, and I will address that. I merely point out that, in early November, the Liberal Democrats were the party of fiscal conservatism and that they now appear to be outflanking the Government in their desire for fiscal expansion.

Rob Marris: May I gently caution the hon. Gentleman? In late November, there existed a Government who were against fiscal stimulus. Last Tuesday, that Government introduced a budget that will involve a fiscal stimulus of 3.2 per cent. of gross domestic product over the next two years. That represents quite a turnaround in just a few weeks. They are a capital-"C" Conservative Government: the Conservative Government in Canada, led by the Conservative Prime Minister, Stephen Harper, and the Conservative Finance Minister, Jim Flaherty, who have, in the past few weeks, fallen into line with the rest of the world. They have recognised that the world has changed in those few short weeks, although they were a bit late in getting there. I suggest that the hon. Gentleman should follow his Conservative colleagues in Canada and go for fiscal stimulus.

David Gauke: The hon. Gentleman always cautions gently. I say to him that there are different circumstances in different countries. I return to the Institute for Fiscal Studies quotation that I cited earlier to the Minister:
	"Labour entered the current crisis with one of the largest structural budget deficits in the industrial world and a bigger debt than most OECD countries, having done less to reduce debt and—in particular—borrowing than most since 1997."
	Our position is precarious and difficult. According to the IFS, our debt as a percentage of GDP will go up to 62.1 per cent.—even the Government acknowledge that it will be 57.4 per cent. According to the IFS, debt will not reach 40 per cent. of GDP for another 20 years. It will double over the next few years, with the danger that the cost of borrowing will go up. That puts us in an extremely difficult position. It would be splendid to be able to afford to cut taxes or fund public expenditure, but the fact is that over many years the Government have failed to put the country in the strongest fiscal position.

Several hon. Members: rose —

David Gauke: I will give way, but I shall just make this point. The hon. Member for Twickenham mentioned the structural difficulties created by the collapse of our housing market and financial services, but the problem goes back further than that. Essentially, it goes back to the reckless running of the public finances in the early part of this decade, when during boom years we were still borrowing huge amounts and organisations such as the International Monetary Fund were warning the UK Government that the fiscal position was unsustainable.
	My party was making that point; my right hon. Friend the Member for West Dorset (Mr. Letwin) made it as shadow Chancellor. Indeed, we entered the 2005 general election making that warning—I am not sure that it did us much good, but none the less we made the case. At the time, the Government and the Liberal Democrats dismissed it. The hon. Member for Twickenham said:
	"We should not be panicked by the IMF into early tax increases or expenditure cuts, which would be damaging in the short term."

Christopher Huhne: I am grateful to the hon. Gentleman for giving way again. His case on the detail of the UK public finances is there, and we can examine the record. However, I am intrigued. Clearly, the United States is the most important global economy, but it has a higher level of borrowing to GDP and public debt to GDP than we do and its banking system is worse placed than ours. Does the hon. Gentleman therefore advise President Obama to shelve his plans for fiscal stimulus?

David Gauke: The US has a reserve currency; it does not have the same risk of a run on its currency as the UK does. The important distinction is that its automatic stabilisers are much smaller than the UK's. A lot of the fiscal stimulus that is going to occur in the UK would happen automatically, and the same does not happen to the same extent in the US. At the point where our respective economies entered into recession, the US was borrowing less than we were.

Christopher Huhne: Will the hon. Gentleman give way on that point?

David Gauke: I shall. I know that the hon. Gentleman is very keen to be shadow economic spokesman, and I shall give him that opportunity again.

Christopher Huhne: I am certainly not keen to be shadow economic spokesman; I cannot imagine anybody doing the job better than my hon. Friend the Member for Twickenham (Dr. Cable).
	Let me make a point to the hon. Gentleman about the reserve currency issue and see whether he has a response. In fact, economic history tells us the exact opposite of the point that he has just made. Reserve currencies are, in fact, most vulnerable to crises. The great sterling crises in our economic history happened precisely because we were unwinding our reserve currency role. The hon. Gentleman's point is exactly, 180°, wrong.

David Gauke: I do not agree with the hon. Gentleman, but I will not get into a lengthy debate with him. I appreciate that he does not want to be the economic spokesman for his party—he is aiming somewhat higher than that.

Mark Hendrick: If the hon. Gentleman agrees with the International Monetary Fund that the recession will hit this country harder than most other countries, why do Conservative Members oppose a stimulus? What would they do to alleviate the suffering that job losses, business failures and everything else that is associated with a deep recession causes?

David Gauke: Essentially, we have a credit crunch and a monetary problem, and we believe that we should focus on monetary policy. That view is also held by, for example, Christina Romer, President Obama's chief economic adviser. The mainstream view is that monetary policy is the most effective way of tackling the problems. Given the UK's fiscal position—thanks to the Government—we do not have a realistic option.

Angela Eagle: The hon. Gentleman claims that the Opposition believe that the problem is monetary, and strongly implies that the only reasonable solution is monetary. If interest rates get as low as they have done in Japan and the US, where is monetary policy then? Is he asking for quantitative easing?

David Gauke: We have been asking for a national loan guarantee scheme, which will get lending going again and help get money flowing through the economy.

Vincent Cable: Let me follow up the Exchequer Secretary's question. I agree that monetary expansion is an important part of the package, but quantitative easing is now the only way of achieving that. I understood the shadow Chancellor to say a few weeks ago that the Conservatives categorically oppose that policy. Will the hon. Gentleman clarify that?

David Gauke: Our position on quantitative easing is that it is the last resort. We have consistently said that it cannot be ruled out. However, for months, we have called for an effective national loan guarantee scheme. This country needs that.  [Interruption.] The Exchequer Secretary says that that is not monetary policy, but it is. It is about getting money flowing through the economy and giving credit to businesses. That is a monetary policy, which we need, and that answers the intervention of the hon. Member for Preston (Mr. Hendrick).

Susan Kramer: The hon. Gentleman is generous in giving way. Does not he agree that, at least in my constituency, banks are not lending, not because they perceive companies as too high a risk—it is not a guarantee issue—but because they simply refuse to lend? Perhaps the reason for that is that they are not aware of the bad assets on their books and they cannot tap the broader financial markets.

David Gauke: There is an issue about greater transparency in the banking system—I agree with the hon. Lady to that extent. However, it is vital that we restore confidence if we are to get the economy working again. The amount of debt and borrowing into which the Government are taking us will not restore confidence for a long time.
	The Financial Secretary cited the Institute for Fiscal Studies report approvingly. I do not have time to go through every detail, but it is extremely gloomy about the public finances. It states:
	"The government's ballooning budget deficit will soon require it to issue debt on a scale last seen at the end of the second world war."
	In the context of perceiving the fiscal stimulus as an enormous help, it is interesting to examine the work undertaken by Oxford Economics, which believes that the fiscal stimulus means that 35,000 fewer jobs will be lost in 2009 than would otherwise be the case. However, it also states that the VAT rise, which will occur to return VAT to its previous level, will cost 30,000 jobs in 2010 and lead to a neutral year in 2011, and that the increase in national insurance will cost 91,000 jobs in 2012 and 84,000 jobs in 2013. This is a short-term measure that leaves the UK in a vulnerable position.
	I return briefly to the subject of public works—

Tom Harris: Will the hon. Gentleman give way?

David Gauke: I ought to press on as this is a curtailed debate, but the hon. Gentleman has asked so nicely.

Tom Harris: I am grateful. The hon. Gentleman has explained in careful detail what his party is against. The only policy that he has come up with in order to alleviate the current recession is a loan guarantee scheme. Is there anything else? Is that it? Given that his party has fulminated against the problem of debt, is the only solution that he is offering a system of lending people more money?

David Gauke: We have set out a series of policies to help small businesses, such as a VAT deferral, which the Government have to some extent taken up. We have set out proposals for national insurance contribution cuts and a council tax freeze. The essential problem is to get lending going again.

Graham Stuart: Will my hon. Friend give way?

David Gauke: I should be grateful if my hon. Friend let me proceed. Very well, I give way.

Graham Stuart: I am grateful to my hon. Friend. It is an extraordinary position, is it not, that the Labour Government came into power on the basis that finally the Labour party had understood the need for fiscal responsibility—that they could spend only the money that they had coming in? Prudence was their watchword, when they first came in, to restore confidence, but now they have reverted to type. They are making the country run out of money and they think the only response to any problem is to throw money at it. That undermines confidence, which is the single most important thing we need to restore the economy of this country.

David Gauke: I agree with that intervention. It appears that this is a Labour Government in reverse. Normally they come in, are reckless, and are forced to take more conservative measures. The present Government appear to have done the reverse.
	I return to a further point about public works, which is essentially a practical argument. I will not develop the argument in great detail, but all parties would agree that where, within existing budgets, it is possible to bring forward projects, given that land and labour are relatively cheap and available at present, it is sensible to do so. Indeed, on the subject of social housing—the point was made earlier—where there are no rigid rules preventing private housing development which has been mothballed from being taken into social housing use, there is a strong argument for considering that.
	There may well be merit in the proposals set out by the Liberal Democrats, but they are not a response to the recession. They are not a way of pump-priming the economy. For example, one of their proposals is a five-year programme to insulate schools and hospitals. That may be a sensible policy, but it is not a response to the recession. They advance an argument for improving railway infrastructure. There may be something to be said for that. I looked at the set of schemes that they proposed, the various lines that would be improved or doubled, and the destinations and areas that those serve.
	The list is interesting. Can the House spot a link? It includes Oxford, the Lake district, Lewes, quite a few destinations in the west country, Southport, Chesterfield, Hazel Grove, Cheltenham, Colchester, and a double whammy—the line from Eastleigh to Romsey.  [Interruption.] The list is not exclusive. I did not see any reference to Wolverhampton, but perhaps that is the least of the worries of the hon. Member for Wolverhampton, South-West (Rob Marris). The policy is not focused on the recession. It is focused on the "Focus" leaflet.
	The problem of getting public works expenditure to tackle the recession is not unique to the UK. It is worth quoting what the US congressional budget office found when it examined the $356 billion spending proposals as part of the fiscal stimulus in the US. It concluded that only 7 per cent. would be spent in 2009 and 31 per cent. in 2010. There is a practical point—planning permission and various details need to be dealt with. It is not easy to do that quickly.

Philip Dunne: On public spending, does my hon. Friend recognise this critique of the relevance of public spending, which was issued barely three months ago, when an hon. Member said that
	"it is entirely wrong for the Government to assume that the economy should be stimulated by yet more public spending rather than tax cuts"?
	That was said by the hon. Member for Twickenham (Dr. Cable) on the BBC.

David Gauke: I am sorry I missed that one, so I am grateful to my hon. Friend for highlighting it. Let me match that quotation from one Liberal sage to conclude with a quotation from another Liberal sage—the Liberal sage, Lord Keynes—who wrote in 1942:
	"Organized public works, at home and abroad, may be the right cure for a chronic tendency to a deficiency of effective demand. But they are not capable of sufficiently rapid organisation (and above all cannot be reversed or undone at a later date), to be the most serviceable instrument for the prevention of the trade cycle."
	That is the problem with the proposals from the Liberal Democrats, and that is why we will not support them, despite the fact that there is much merit in the motion.

Ian McCartney: I support my right hon. and hon. Friends on the Front Bench. Irrespective of the crisis that we face in international banking and the financial sector, the strategy of co-ordinated investment in social and economic regeneration over the past decade has worked and continues to work. Without it, communities such as my constituency would still have Dickensian schools, hospitals and GP surgeries, and we would have had construction workers on the dole for the past decade and more. If we are serious about regenerating communities and engaging the private sector to reinvest in communities, the public sector requires a co-ordinated approach to replenishing the public realm.
	I invite my right hon. Friend the Financial Secretary to visit us in my area of Wigan. For the past decade, we have worked with the private sector to reinvest in our townships, abandoned by the last Conservative Government, and our pit villages and our textile communities, left almost overnight with no economy and a disinvestment in our public services. That caused great social and economic dislocation. Some parts of our community are still grappling with the consequences a decade or more later.
	It is important that we do not look for merely a short-term fix to get us out of our fiscal difficulties because of the failure of the American and other banking systems. We must sustain our investment for social and economic good. If we are serious about re-skilling and up-skilling our work force and giving every kid in Britain the right to be the best they can be, we need a co-ordinated approach at local level, with public investment linked to engagement with the private sector in order to develop our infrastructure and encourage investment in communities where previously the private sector had disinvested for a decade and more.
	In our community, the local authority worked with the private sector to encourage the creation of public sector campuses in our small townships and our larger ones. We want the Government to utilise capital investment in the NHS, the education system, housing and local government, and to bring those investments together, instead of allowing investment by individual Departments to be made in a pepper-pot way. We need to bring forward those investments to ensure a better-resourced outcome from public investment.
	During this crisis, the Government have established a National Economic Council. Before Christmas, we in Wigan met the banks, building societies and private sector developers to create our own economic council to ensure that work introduced at the top line happens locally, on the front line. I say to the Exchequer Secretary that when top-line announcements are made, we must have the capacity to ensure that they are followed through at a local level. We will be judged by communities when they can see what we talk about in this place making a difference in their everyday lives. When we say that we will invest in schools and colleges, we have to ensure that that investment is set out in an effective way over the next two or three years, and that we are certain that local authorities can invest in them. We have to be sure about investment in housing, whether it is social housing or public-private investment to bring back private sector housing into public use, such as old stock that needs refurbishing, or new stock that cannot be sold in the marketplace today. We need a time scale that ensures that people can see the differences made.
	It is important that alongside those public investments, we ensure that the banking system generates enough resources, so that where public investment with the engagement of the private sector is needed, the private sector can work in sync with us. That is critical to the LIFT—local improvement finance trust—strategy for NHS investment, particularly in primary care. We can get an agreement with the national health service, but without investment to encourage the private sector to engage in big infrastructure projects, and without banks agreeing to participate with private sector developers as part of the LIFT company, some of the Government's priority projects will be delayed. It is important to listen to voices at ground level to ensure that top-line announcements by Ministers are delivered on the bottom line, in the local community.
	We must not allow the Conservatives to get away with what they have attempted to get away with tonight. They have made it absolutely clear that there would be immediate removal of capital investment in this country under a Conservative Government, leading to dislocation for the private and public sectors. The consequences for public services, and private sector companies engaged in public services, would be double what they were under the last Tory Government during the 1980s and 1990s. It is not rocket science. The policies advocated by the Tory Front-Bench spokesman, the hon. Member for South-West Hertfordshire (Mr. Gauke), were those pursued by the last Conservative Government during two recessions. At that time, the consequence of those policies was a laying waste of my community and its public services. We were trying to provide public services in our community at a time when nine out of 10 people on council estates had to rely on some form of state benefit. That was the level of dislocation caused the last time the Conservatives put into practice the policies that the hon. Gentleman advocated in relation to this recession. These are siren voices: they were wrong then, and they are wrong now. It is important, in arguing our corner, that we do not just become administrators of Treasury policies. We should be enthusiastic and tough in arguing our corner on public service investment.
	My final point is about the banks, and it is not an easy hit. It is important, having rightly saved the banking system from meltdown, that the system does not revert to type. We saved the banking system for a simple reason: to protect the long-term future of business and commerce, and to protect pensions and other assets. It is no job of ours to sit back if a bank allows 12,000 jobs to go to the wall, as one bank in my constituency is doing. Why is that happening? Because the bank will not implement the strategy that the Government rightly outlined weeks ago. It is our task not only to ensure that public services invest in the way we want them to, but to make sure that the banking system fulfils its side of the bargain. Good businesses in our constituencies are going to the wall not because they have failed—they have not—but because they need support from the banking system to get them through this recession into better days.
	I hope that, in her response, my hon. Friend the Exchequer Secretary gives a clear indication of how the Government are ensuring, alongside local authorities, that public sector investments will take place in a time scale that will make a difference. They must take further action, if necessary, to protect individual companies when the banks are acting inappropriately and putting those businesses at risk.

Bob Russell: The debate has been global and national, with interventions of a constituency nature. I shall make some brief remarks.
	The Financial Secretary said that the colleges programme is steaming ahead, but oh no, it is not. If the Exchequer Secretary does not believe me, I invite her to come to Colchester, where phase 1 of the Colchester institute is about to finish. In a few weeks' time, the entire work force will leave the site to join the dole queue because the much-promised phase 2 does not have the necessary finance. Given some of the interventions we have heard, I imagine that that story is being repeated in other constituencies.
	I made two interventions on those speaking on behalf of their Front-Bench teams, when I asked about renovation and restoration before demolition, and about new build. Let me set out the significance of those comments. I welcome public investment in my constituency whether it is £100 million or £150 million, as promised by the Conservative-led Essex county council for new schools—or at least I welcome part of it, because some of it will not provide value for money. One of the aspects that will not provide value for money is the demolition of a perfectly good secondary school opposite the Colchester institute. The people of Colchester want phase 2 of the institute to be built before we start demolishing buildings to provide new ones. We need a bit of joined-up government.
	Many hon. Members will know that I have been badgering the Government for 12 years about the resumption of council house building. It is a fact that Conservative Governments have built more council houses since the second world war than Labour ones. I made that point to Brother Blair and to the then Deputy Prime Minister, and I have made it to the current Prime Minister. We need to invest more in existing housing stock that stands vacant. In my constituency, the Government have in excess of 200 houses standing empty, for which they are paying rent approaching £750,000. Those 200-plus family houses could accommodate some of the families for whom the waiting list has virtually doubled under Labour. The houses are under the control of the Ministry of Defence, and I make a particular plea for the Government to engage in a bit of joined-up thinking, so that some of those families can move into houses that currently stand empty. I am sure that there are other houses standing empty across the country which should be brought back into use, and we could also buy up houses in new developments—but not flats, please. We need family houses, and I urge the Government to take that line.

Andrew Tyrie: I shall be brief. I do not know how long the winding-up speeches are going to be, but I am sure that someone will signal to me when they want me to sit down. I will do my best to make a few comments until then.
	I would like to clear up a point that was made as a result of an intervention by the Exchequer Secretary. I think that she said something to the effect that we did not have any monetary policy tools left to deal with the crisis now that interest rates were so low.

Angela Eagle: I did not say that.

Andrew Tyrie: If that was not the case, I would be grateful if she clarified exactly what she did say.

Angela Eagle: I was asking the hon. Member for South-West Hertfordshire (Mr. Gauke) a question about monetary policy, should we get to the stage where interest rates in this country are as low as they have been in Japan and the USA. I was talking about a hypothetical situation, not one that is in existence, because, as the hon. Member for Chichester (Mr. Tyrie) knows, interest rates are currently 1.5 per cent.

Andrew Tyrie: I think that the hon. Lady is labouring under a massive misapprehension about monetary policy and the main tools available to the authorities. I hope that that misapprehension is not informing the higher reaches of policy making in the Labour Government, because if it is, it must be partly responsible for the talk about using all sorts of other tools, which in my view is probably premature.
	At least three monetary tools are still available. The first, as the hon. Lady correctly implies, is 1.5 percentage points of interest rate cuts. Secondly, there is the use of funding policy. I find it quite baffling that the Government should be allowing the Debt Management Office to issue so much long-dated stock, when they should be asking it to fund at least part of the deficit at the short end, thereby generating some further monetary easing. The third tool is the exchange rate, which she has ignored completely. The dramatic fall in the exchange rate is by far the biggest event to have taken place in monetary policy—bigger even than the fall in interest rates that we have seen—and it will have considerable effects. However, those effects will take some months to come through. Until they do, monetary policy needs to be given a chance to work.
	Fiscal policy is broadly working—that is, the fiscal stabilisers are already operating as they should. It is monetary policy, and in particular that part which pertains to banks and the credit system, that needs a good deal of Government attention. However, they have been remiss in not acting on that earlier, first, by not underwriting the banks with recapitalisation, and then, when they did, by recapitalising the banks in a way that encouraged them to strengthen their balance sheets at almost any cost, thereby negating part of the purpose of the recapitalisation in the first place.
	Given that so little time is available and given the fact that we are going to hear a couple of Front-Bench speeches in a moment, let me quickly make one or two further points.  [ Interruption. ] I am getting a signal that it might be helpful if I make only one further point, so I will do that, and in only one minute, too. It might be misrepresented as being party political, but the point that I am going to make, which is almost universally accepted by all dispassionate observers of economic policy, is that there is absolutely nothing left of Labour's economic policy at all.
	The policy that was put together a decade ago has been completely dismantled. The idea—the rhetoric or the mantra—of so-called spending to invest was long ago replaced by spending to consume. Indeed, the use of the word "investment" for current spending in the public sector has devalued the term, which has been damaging. The fiscal rules were consigned to the dustbin at the time of the Northern Rock episode—it was the first time that they were seriously tested, and they collapsed. Then there was the Chancellor's autumn statement, which tore up all the Labour Government's remaining pledges on taxation—the pledges that they used to try to persuade middle Britain that the economy was safe with them.
	It is against that backdrop that in just over a year we will hold an election. The conduct of economic policy will be central to that election. I leave the House with one thought. When they go to the polls, the electorate will have in their mind a simple question. When looking at the Prime Minister and the running of the economy over the previous decade or so, will they be able to say well done?

Sarah Teather: This has been an interesting, albeit short debate. I am aware that I have very little time to wind up, as we would like to finish by half-past 6 to ensure that House staff can go home.
	My hon. Friend the Member for Twickenham (Dr. Cable) opened this debate by making a case for sensible public investment that would create jobs today and build assets for tomorrow. However, in the interventions that we have heard today, many of my hon. Friends, as well as colleagues in other parts of the House, have pointed out examples of programmes that have stalled. In particular, my hon. Friend the Member for Mid-Dorset and North Poole (Annette Brooke) mentioned building projects for colleges in her constituency. I was surprised by the response from the Minister, who said that those projects were steaming ahead, because it is self-evident that they are not.
	The right hon. Member for Makerfield (Mr. McCartney) said in his contribution that the Government would be judged on how they make a difference to people's lives on the ground. Unfortunately, that was not the tone of the Minister's response. He agreed with almost everything that my hon. Friend the Member for Twickenham said about the need for a fiscal stimulus, the need to invest in social housing and the need to invest in insulation, but he made no new announcements. We are talking about an issue of scale. Ticking a box and saying that the Government have a programme is not going to help us out of recession.
	The Conservative spokesperson, the hon. Member for South-West Hertfordshire (Mr. Gauke), rightly pointed out the inconsistencies in the Government's position. However, he said nothing about how the Conservatives would lead us out of the current recession and seemed to misunderstand the point that my hon. Friend the Member for Twickenham was making. He has consistently argued for borrowing to invest in capital projects, not borrowing to fund tax cuts or current expenditure. Those things are different, and the hon. Gentleman should be aware of that.
	My hon. Friend made the point, which others made too, that unemployment involves a large cost. Doing nothing is not a cheaper option, and I wish that the Conservatives would be aware of that. As for railway redevelopment, the hon. Member for South-West Hertfordshire perhaps gives us credit for having more cunning than my colleagues are capable of. However, now that he has acknowledged on the Floor of the House that Liberal Democrat projects will make an immense difference to many of my hon. Friends' constituents, I am sure that his words will be quoted in Liberal Democrat "Focus" leaflets in no time at all.
	Nowhere is there a more urgent need to invest than in housing. There are 1.77 million households on the housing waiting list in England. Far from the need declining, more and more families are struggling to afford private rents or mortgages. The Council of Mortgage Lenders has estimated that 75,000 families will have their homes repossessed this year. Many will arrive at their council's door with their belongings in one hand and their children on their other arm. Councils will have nowhere to house those people, because housing projects have been drying up.
	Demand for housing does not dry up because house prices are falling or because banks have stopped lending. As soon as lending recovers, the real and present danger will be that we might end up with hyper-inflation in the market, because we will have failed to keep pace with true demand in the meantime. As my hon. Friend the Member for Twickenham said, the truth is that house building in both the public and private sectors has stalled. Figures from the National House-Building Council suggest that the industry started fewer than 30 per cent. as many homes in the last quarter of 2008 as it did in the last quarter of 2007.
	In an intervention, my hon. Friend the Member for Eastleigh (Chris Huhne) mentioned developments in his constituency. Many such developments are now being mothballed, which is why my hon. Friend the Member for Twickenham has been arguing for a dramatic increase in the amount of funding available for councils and housing associations to buy up such properties. The Minister said that that money had been made available, but only £200 million has been made available through the national clearing house scheme, most of which has been spent. Surely that demonstrates the need for more money to be made available.
	The problem with housing associations being able to build is partly to do with lending and partly to do with the model of cross-subsidy that has been used for a decade to fund social house building. That model will simply not work in the current climate. Private sales have dried up. Housing associations that previously relied on being able to sell homes off plan cannot even sell them when they are fully built. Furthermore, low-cost home ownership lending products are no longer being offered by banks, so all the options for housing associations to cross-subsidise their social housing, affordable housing and housing for rent are just not available.
	As a consequence, many housing associations have stopped building—they have certainly stopped building shared ownership homes—because they know that mortgages are not available. The consequence for them, as for the construction industry, is that they are making many staff redundant. The Government will have to accept that Treasury subsidy-per-unit targets will not work at the moment. The Homes and Communities Agency says that it will make more flexible funding available, but we need that funding to get to housing associations quickly, so that they can take advantage of it. Delay is costly for those people waiting for social housing.
	I said that a consequence of the fact that building has stalled is that construction workers are being laid off in their thousands. The Federation of Master Builders predicts that job losses in the construction industry could reach 90,000 this year. The consequence is not just short-term, and it is not just misery for families whose major breadwinner has lost their job. The costs will be felt in the British economy for at least a decade, because even when the money to build again becomes available, the country will have lost vital construction skills, and it will take a decade, or possibly even a generation, for us to recover. Families, certainly in my constituency, cannot wait that long for house building to begin again.
	In the face of that, the Government have been tinkering at the edges. They are bringing forward £400 million in the next 18 months for social housing providers to deliver just 5,000 homes, but 1.7 million households are on the housing waiting list. A further £150 million was announced in the pre-Budget report, but reports from the Department for Communities and Local Government suggest that it has not yet even worked out how to allocate that. It is a drop in the ocean given the fiscal stimulus that is needed for the recession, and given the number of families desperate for housing.
	Some £12 billion was frittered away on a VAT tax cut that made little or no difference to most families; that money would have been better used in putting unemployed people back into work, and in leaving a lasting legacy that would save energy, reduce bills and fight climate change. With the money used to make a tiny VAT cut, we could have insulated every school and hospital in the country, funded insulation for a million people languishing in fuel poverty, and have built 40,000 extra zero-carbon social homes. The Conservative spokesperson said that that was not a response to the recession; well, it is certainly a response to need, and he has come up with no response to the recession whatever.
	If the Government really wanted to cut VAT, how much more useful would it have been to cut the rate of VAT for rebuilding and renovation? My hon. Friend the Member for Colchester (Bob Russell) made a point about the number of empty homes that are left derelict, not just in the private sector, but often in the public sector. There are more than 700,000 empty properties in England—enough to make a sizeable dent in the amount of housing needed in this country—yet the Government are not prepared to take the action necessary to bring those homes back into use. What is needed from the Government is a dramatic building programme that focuses attention across all Departments. They need to get the public sector to release land now. They need to bring forward substantial amounts of new money, and money in the existing comprehensive spending review, to make sure that housing associations and councils can buy up land and property while prices are cheaper.

Angela Eagle: We have had a short but interesting debate this evening, and I would like to deal with some of the issues raised. Interestingly, the hon. Member for Twickenham (Dr. Cable) said that capital expenditure simply is not taking place at the moment. I am glad to say that that is not true; I am sorry to disappoint him, but there is a great deal of work going on, and a great deal of extra capital expenditure coming through. I hope that he is reassured by that.
	The Government will continue to show the commitment to investing in public services that we have demonstrated since 1997. That commitment is in contrast to years of neglect under the previous Conservative Government. Our investment has meant the building of 1,100 new schools, and more than £20 billion of improvements to social housing. The 100th new NHS hospital was recently successfully completed, and more are in the pipeline. When we came to government in 1997, 50 per cent. of the NHS estate dated from before 1948. Today that figure is down to just 20 per cent. We are proud of that record and are determined to continue investing in UK infrastructure to ensure world-class public services in buildings fit for the 21st century.

Bob Russell: To mention just one of the many examples that have been given on the Floor of the House in this debate, the builders are to leave the Colchester institute site in the next few weeks. Many other colleges are in exactly the same position; building work is grinding to a halt. What is happening?

Angela Eagle: There is no freeze to the capital programme for further education expenditure, and there is no question but that the £110 million that was brought forward in the pre-Budget report this year will be spent. There are signs that the ability of some colleges to raise their own funds for proposed projects is being affected by the downturn, and it is right that the Learning and Skills Council should take a look at the proposals for capital schemes in the pipeline to assess the likely impact on funding support for individual projects. I understand the concerns that have been raised, but hon. Members who are anxious about projects in their constituency should recognise and accept that the 253 projects to which my right hon. Friend the Financial Secretary referred have been given the go-ahead, and that more than 150 of them are due to be completed this year, so there is a substantial programme of capital works in the pipeline—£2.3 billion over the next three years. I point out that the figure was zero in 1997.
	We know that we can sensibly combine our commitment to investment in our infrastructure and our public services with a real boost to the economy to help us through this very difficult global downturn. That is why we are bringing forward capital expenditure—not only because it is the right thing to do if we are to support jobs and stimulate economic activity, but because it will modernise Britain's infrastructure and ensure that we are in the best possible position to take advantage of the upturn when it comes. That is why we are using the fiscal stimulus to invest in our competitiveness for generations to come.
	I agree with the hon. Member for Brent, East (Sarah Teather) that it is far more costly to do nothing than to invest in increased public expenditure as part of a co-ordinated fiscal stimulus to deal with the unprecedented global situation in which we find ourselves. That is why the pre-Budget report in November set out a fiscal stimulus, including £3 billion of capital expenditure on schools, transport and homes, which is to be brought forward from 2010-11 to the next financial year. That is real help now, and it is in contrast to the attitude of the do nothing Tories. This Government have taken concrete action to give a timely boost to prevent job losses and stimulate economic activity, and we are on track to deliver that spending.
	There are reports that the difficult economic climate will adversely affect the private finance initiatives that are a common feature of the Government's public investment programmes. Some of those worries have been expressed this evening. There is no doubt that the market is challenging. The credit crunch has reduced liquidity in the financial markets, and that has affected all debt-raising. Understandably, there is a concern that that could result in new PFI deals struggling to find finance, or increase costs for those that do obtain finance. Obviously, we are watching the situation extremely closely.
	Projects continue to reach financial closure. As my right hon. Friend the Financial Secretary said, in January, two projects—the M80 highway project and the Forest Gate housing project—closed successfully. That involved £370 million of public investment, which had been committed and which is now being put to effect. We are working to push forward all the projects currently in the pipeline. In recognition of the potential difficulties facing such initiatives, Treasury officials are working with other Departments and Partnerships UK to help ensure that projects are able to obtain finance in a timely fashion. In addition, the measures to unfreeze credit announced last month by my right hon. Friend the Chancellor are intended to help remove barriers to lending.
	My right hon. Friend the Member for Makerfield (Mr. McCartney) made an impassioned speech, as usual, about the importance of protecting communities during such downturns. I agree with him about the policy of the Conservative party, which is to cut public expenditure now, right in the middle of a recession. That is the opposite of a fiscal stimulus. The Conservatives would not do nothing—they would take action that would make matters worse. By cutting public expenditure, the Conservatives are once more falling into the trap of laying waste to entire communities and huge areas of the country. This Government will not fall into that trap. We are committed to ensuring that public expenditure remains higher, even after the fiscal consolidation that we have planned. Public capital expenditure will be 1.8 per cent. of gross domestic product in 2013-14, which is three times more than the paltry 0.6 per cent. that we inherited from the Opposition. The Government have addressed the huge backlog—

Paul Burstow: claimed to move the closure ( Standing Order No. 36).
	 Question put forthwith, That the Question be now put.
	 Question agreed to.

Question put accordingly (Standing Order No. 31(2)), That the original words stand part of the Question.
	 The House divided: Ayes 44, Noes 229.

Question accordingly negatived.
	 Question put forthwith (Standing Order No. 31(2)), That the proposed words be there added.
	 Question agreed to.
	 The Deputy Speaker declared the main Question, as amended, to be agreed to (Standing Order No. 31(2)).
	 Resolved,
	That this House notes the substantial investment over the last decade in frontline public services in every region of the country; notes that the Government paid down debt over the last 10 years, reducing it from 42.5 per cent. to 36 per cent. of GDP over the last economic cycle, before the global credit crunch hit Britain; further notes that public sector net investment was only 0.6 per cent. of GDP in 1997-98 but was 2.1 per cent. of GDP by 2007-08, supporting sustained increases in investment in schools, hospitals and other key public services; welcomes the action the Government has taken in response to the international financial crisis both to support financial stability and to provide help for people and businesses at the time when they need it most; notes that to support the economy in the short term the Government's fiscal stimulus includes public sector net investment rising to 2.7 per cent. of GDP by 2009-10 and a value added tax cut putting over £12 billion into the economy throughout 2009; further notes the Pre-Budget Report 2008 measures to bring forward £3 billion of capital investment from 2010-11 to 2008-09 and 2009-10 which will support a number of different industries and jobs and directly improve key public services including schools, transport projects and social housing; welcomes the Government's commitment to ensuring that the overall level of capital spending is sustainable and protects investment in public services; and believes that action now to support the economy will enable Britain to take advantage of opportunities arising as global growth resumes.

Parliamentary Standards (Constitutional Reform)

Mr. Deputy Speaker: I inform the House that Mr. Speaker has selected the amendment in the name of the Prime Minister.

David Heath: I beg to move,
	That this House believes that the United Kingdom needs and deserves a Parliament that is fit for purpose and free from the taint of partial interests; is dismayed by the slow pace of reform which has failed to deal effectively with the opportunities for abuse; welcomes the suggestions from Liberal Democrat members of the House of Lords to introduce powers to suspend and expel Members of that House, require Peers to declare any interest in all legislation, make all Members of that House resident in the United Kingdom for tax purposes, put the Lords Appointments Commission on a statutory basis, bring Members of both Houses into the remit of the Parliamentary Commissioner for Standards, and tighten up on the issuing of passes to Parliament; believes however that there is now an urgent need to bring forward plans for an elected House as agreed by a majority of hon. Members; is concerned at the lack of progress on the Prime Minister's constitutional renewal programme; is disappointed that current legislation fails to provide for limits on donations or spending by political parties; calls for urgent and effective action to reduce parties' dependence on large donors and trade union interests; believes that comprehensive reform of the procedures of the House is essential to enable it to scrutinise Government and the spending of taxpayers' money more effectively; and recognises the need for urgent action to restore the trust of the British public in Parliament as an institution and in politics as a profession.
	The past fortnight has been a bad couple of weeks for parliamentary politics. We had the aborted attempt to exempt Parliament from the Freedom of Information Act 2000, the revelations about the activities of certain peers and a reminder, in the Standards and Privileges Committee's report, of the actions of one hon. Member. A week ago, when we discussed the freedom of information provisions, perhaps in a genuflection to Burns, I asked colleagues to try to see themselves as others see us. I despair at what those outside the House who are struggling to keep their jobs and to keep a roof over their heads think when they read in their newspapers of people asking for £10,000, £20,000 or up to £100,000 to affect legislation by the exercise of whatever influence they believe they have. This cannot go on, and it is time that we took action.
	A sensible, appropriate and proportionate response is to recognise that Parliament is in urgent need of reform. I refer to Parliament as a whole, as the matter is not simply about those at the other end of the corridor. The title of the motion, as it was read out by the Leader of the House at business questions on Thursday—I am sorry not to see her in her place—referred to this as an "urgent" case. When I took that title to the Table Office, its staff told me that they were unhealthy— [Interruption.] I mean unhappy—they might be unhealthy, too. They said that they were unhappy with the term "urgent" and that it was not a parliamentary term. What could better illustrate the difficulties of reforming this place?
	I hope that we can conduct today's debate in a non-partisan way, because it is desperately important that we do so.

Andrew MacKinlay: But?

David Heath: No, there is no "but". It is unwise for us to try to score political points off one another on these issues, and it is dangerous for anybody to claim moral superiority. I simply say to the whole House that those who are tempted to throw rocks either down the corridor or at other parties in this House should realise that we all inhabit an exquisite, Victorian, neo-Gothic house of glass. Every time we cast aspersions on other politicians, those aspersions are applied to us in our constituencies, however inappropriately. It is public perception that is important.

William Cash: Will the hon. Gentleman deal also with the question of constitutional reform, which is implicit in the motion? The issues of standards and conduct to which he refers are matched by, if not less than, the problem of whether this is becoming a sham Parliament.

David Heath: There are all sorts of constitutional issues, and the hon. Gentleman has a particular viewpoint on one of them. The perception outside is that politics is not being conducted in the way that it should be, and that we in this House and in the body politic generally are not clearly free from the taint of partiality that affects all of us. That is very dangerous, but more than that there is a perception that our political structures are not fit for purpose or serving the country well. That is where the thrust for constitutional reform comes from.
	I turn first to the other end of the corridor and to another place—the Lords. There was palpable relief that for once, the reports over the past week were about things down that end, not here. That is a wrong-headed relief, because when there is damage to the reputation of politics, it affects all of us. The reputations of all of us are at stake. If the other House does not operate with credibility, it cannot properly perform the role that it is required to perform in our constitutional arrangements.
	We therefore need to be concerned, as I know are many hon. Members, and noble Members in the other place who are honourable in their intent, about sorting matters out. Are there not inherent problems, however, with this mish-mash or half-reform that we have left in the other place? We still have 92 hereditaries who are there by accident of birth—never mind the pretend elections among that exclusive franchise. Uniquely among all Parliaments, we have people who are there—

Gordon Prentice: There is Tonga.

David Heath: The hon. Gentleman refers to Tonga, but there has been reform there, I think, so we are unique.
	We have the 26 bishops as well, and 625 life peers. Those life peers are all placed there by—let us make no mistake about this—patronage. They are placed there because somebody has suggested they would be an ornament to that House. Indeed, some are; some are very able people who work very hard for this country. There are others, however, who, frankly, do not, and I afraid that my respect does not extend to every Member of the other place.

Chris Ruane: Name them.

David Heath: I am not going to name them, because as I have said, I am not going to be partisan, but let us say for a start that it is reported that at least eight were allegedly prepared to change the law for cash in their hands. To me, as to many peers, that is outrageous. Furthermore, however, we have as Members of the House of Lords a convicted perjurer, a convicted fraudster and a convicted fire raiser. What a rum crew we have making laws for this country. We also have four peers who do not choose to be resident in the United Kingdom for tax purposes. They do not choose to pay the taxes that the rest of us pay, but they choose to make the laws that the rest of us have to live with. Two of them made solemn pledges that they would become resident for tax purposes—pledges which, since they have been elevated, they have chosen to ignore.

Philip Davies: The hon. Gentleman and his party make a big play of the fact that everybody who makes laws in this country should pay taxes in this country. That is a principle I can support, but can he tell me whether that extends to European Commissioners and Members of the European Parliament, who make 80 per cent. of the laws of this country, but who, as far as I am aware, do not pay any taxes in this country?

David Heath: As a matter of fact, they do pay taxes in this country.  [Interruption.] No, not those who represent other countries, of course; oddly enough, they do not, but those who are resident in this country, as our MEPs are required to be, are paying taxes in this country.

Bob Spink: Leaving Europe aside—[Hon. Members: "Hooray!"]—I agree with the thrust of the hon. Gentleman's speech so far, but does he agree that the law should be obeyed not only to the letter, but in its spirit? One of the tax exiles in the other place is funding campaigning in marginal constituencies to the tune of tens of thousands of pounds, to get a political advantage in a way that the public would perceive as totally wrong. What does the hon. Gentleman think about that?

Philip Davies: When did you start complaining about that, Bob?

Mr. Deputy Speaker: Order. I am beginning to have some forebodings about the way this debate is going. I should remind hon. Members that we must be very careful about criticising particular people, and if they are only allegations or suggestions, that is quite out of order. Only factual matters can be referred to on the Floor of the House. I think the House will do itself a service in the country if we are seen to conduct this debate in a sober and serious way, rather than in the rollicking manner in which it has been conducted so far.

David Heath: I agree, Mr. Deputy Speaker, which is why I was very careful not to cast aspersions on any particular peer. I was simply making the point that all the people to whom I referred are noble Members—they are all people who are taking part in the making of the laws of this country. I think there is more than an argument that reform in this area is overdue.

Gordon Prentice: Lord Laidlaw is a self-confessed tax exile and he gave more than £100,000 to the Conservative party last year. Is it not inappropriate for any political party to accept donations from someone who is a self-confessed tax exile?

David Heath: I believe the hon. Gentleman is absolutely correct in saying that the gentleman in question has made no secret of the fact that he lives outside this country—he lives in Monaco, as I understand it—so I do not think we are in a contentious area there.
	As I shall explain, this problem can be cured by proposals that have been made, and which I hope the Government will now accept. That is the point of this section of my speech: there are some immediate steps that can be taken—my noble Friends in the other place have suggested them—and the Government would do well to agree to them. Indeed, there are intimations that they have agreed to them. The Lord Chancellor was a very busy man over the weekend, writing columns in various newspapers saying he was minded to do this, that and the other. I rather hoped he might come to the House today when there was a debate on the subject and tell us what he proposed to do. Instead, however, he chose to send the Deputy Leader of the House of Commons, the hon. Member for Rhondda (Chris Bryant)—

Andrew MacKinlay: Unpaid.

David Heath: Yes, unpaid. I mean no disrespect to the hon. Member for Rhondda, but I feel that the Lord Chancellor and the Leader of the House might have chosen to be here, because they seem to have a lot of opinions on this subject, and they are hinting them to the press but not expressing them to the House.
	What do we believe should happen? The following proposals have come from my noble Friend Lord McNally, and some of them are already before the other place as legislative proposals. One of them is that there should be the power to expel and suspend. It is extraordinary that that was discussed 10 years ago and still has not been brought into force. Another is that the House of Lords Appointments Commission should be on a statutory basis. That would cure the problem of peers making pledges to the Appointments Commission but then not honouring them. Both those proposals are contained in a Bill introduced by my noble Friend Lord Steel.
	It has been suggested that all peers, and indeed all Members of Parliament, including MEPs—let us cover the points made by the hon. Member for Shipley (Philip Davies)—should automatically be considered resident in the United Kingdom for tax purposes. That could be done at the stroke of a pen. My noble Friend Lord Oakeshott has proposed that, and it can be done now. Will the Government agree tonight to do that?
	There is also the view that peers should be brought under the supervision of the Parliamentary Commissioner for Standards. We have improved self-regulation in this House; it is not perfect, but it is better, and one of the reasons for that is the existence of the Parliamentary Commissioner for Standards. It is extraordinary that self-policing is considered to be a sufficiency elsewhere, and I believe that all Members of Parliament should be brought within the remit of the Parliamentary Commissioner for Standards.
	The issue of passes is a security issue, apart from anything else. Passes are issued to Members of Parliament for members of staff to do work in the House, not for any passing lobbyist who happens to want easy access to the parliamentary estate. There should clearly be a tightening up of the issuing of parliamentary passes.
	Lastly on my short shopping list for the House of Lords, there should be a declaration of interest irrespective of whether somebody is directly contributing to a debate. Some peers clearly seem to imagine that provided they do not actually make a speech it is all right to go along to Ministers' or civil servants' offices and argue the case for a change in legislation, which they are being paid to do, and that in some way that is not paid advocacy. The proposal seems very simple to me and the Government could usefully adopt it.

Andrew MacKinlay: Surely if people declare an interest it should ipso facto disqualify them from speaking about the matter in question and voting on it. There seems to be a culture in the other place that if someone makes a declaration of interest, they can proceed to speak about it, articulate it and advocate it, but in my view it should be a disqualification.

David Heath: The hon. Gentleman is right—it is a cultural thing, although I hesitate to say that we always get it right in this House. We have to be much more careful.
	I have set out a short shopping list, and if the Deputy Leader of the House is listening he could usefully say in his response tonight that he agrees to it and that those reforms will be undertaken, either through the legislation already proposed by my noble Friends, or through Government legislation if he prefers; but also that something will be in place in weeks rather years. However, to do that will be but to apply an elastoplast to the latest wound. There comes a point when we have applied so many elastoplasts that we tend to look a little ridiculous, which is the thrust of my argument. We have gone past the point when we can simply apply sticking plaster—we need fundamental reform to make our democratic structures fit for purpose. They are transparently not fit for purpose at present. We need fundamental reform.
	There has never been a better time. Because of what we have heard over recent months and years, many people—not just commentators, but anyone who thinks seriously about the issue—think it is time to put this House, the other House and our parliamentary structures in order.

David Borrow: On declaration of interest, does the hon. Gentleman agree that there should be rules about the level of outside interests that parliamentarians, whether of this or the other place, should be allowed while still maintaining their role as a Member?

David Heath: My personal opinion is that it is extremely difficult to have an outside job and do the job of Member of Parliament. Other may be much better at juggling their time than I am, but as far as I am concerned being a Member of Parliament is a full-time job—and a lot of Members feel that way, too. It will be interesting to see whether the Leader of the House, who is not here today, will bring forward proposals, as she intimated last Thursday, to put into effect exactly what the hon. Gentleman said.
	There are three possible reasons why the Government have been so weak in introducing reforms, and all three may indeed play a part. First, the Government do not believe that there is a public appetite for reform; they believe that somehow these are Hampstead liberal or socialist arguments and that people are not interested in them because they are not the real world. The Government are completely wrong; we cannot achieve what we want to do in putting right what is wrong in this country without democratic structures that support and enable reform. There is a public appetite for cleansing the stables.
	Secondly, the Government have friends who disagree—as do all parties. We know that, although I suspect that we have less disagreement at this end of the corridor. I make no secret of the fact that we have disagreement at the other end. All parties have members who disagree—those who wish, for reasons of their own, to stick with a system that they believe to be either in the national interest or their own interest. When somebody has been appointed a peer, it is astonishing how quickly they consider that the system that appointed them must be an exceedingly good one, because it had the perspicacity to put them on to the red leather seats. However, I fundamentally disagree with that view. At some stage we have to confront the issues. We have to put the argument and let those who disagree do so and lose the argument.

Alan Beith: Is there not an even more bizarre version of the argument? Peers have to vote for an appointed House to protect the primacy of the elected Chamber. If the primacy of the elected Chamber depends on an unelected Chamber voting to remain unelected, there is something very odd about the argument.

David Heath: My right hon. Friend is absolutely right, which brings me to the third reason and the core problem with the Government—timidity. The Government are afraid to put their neck out and do those things. They like to hint and suggest; they like to form all-party Committees to spend a lot of time looking at things—I have sat on two of them—but when it comes to putting legislation before Parliament and pushing it through they are not prepared to act.

John Redwood: Is not another problem that the Government are afraid of proper accountability and probing? For example, they spend £37 billion on bank shares, yet none of us can ask them, "Why don't you do proper due diligence? How much are those banks going to lose? How much will they pay in bonuses?" There is no accountability and what I like about the hon. Gentleman's motion is that it says we need to scrutinise spending.

David Heath: The right hon. Gentleman pre-empts what I was about to say. He is absolutely right.
	I have been talking about Lords reform. It has been agreed by the House. It has been agreed by the cross-party Committee in broad terms. As far as I know, it has been agreed by the leadership of all three parties. It has even been agreed by thundering editorials in the broadsheets over the past week, so what on earth is the delay? Why do we have to wait for what we all agree is necessary in terms of Lords reform?
	It is not good enough to concentrate only on Lords reform, however. We have to look at Commons reform as well, which is why the point made by the right hon. Gentleman is so important. We have to make this House more effective. Why on earth do we not yet have a business Committee? We waste time on inconsequential measures, but when there are really important matters before the House, such as the Report stage of a big Bill when Members want to say what they need on behalf of their constituents, they are unable to do so because of some ridiculous programme motion that does not take into account the gravity or importance of the measure.
	The other point made by the right hon. Gentleman was about scrutinising Government spending. Why are we so poor at scrutinising public expenditure? The nadir for this Parliament was in November—the supplementary estimate that spent £37 billion of taxpayers' money. What happened? We had a short debate when about only 12 Members were in the Chamber. We could not table amendments or apply proper scrutiny. That is not what people send us to the House to do—allow the Government to spend eye-wateringly large amounts of money on a rubber stamp, on the nod, without proper scrutiny. That is where we need reform in this place.

Jo Swinson: My hon. Friend is right to talk about the need for Commons reform, particularly to make sure that Parliament takes power back from the Executive and has the ability to scrutinise. Does he agree that we need to give power back to our constituents to scrutinise what we do, whether through transparency on expenses or giving them the right, if a certain percentage of them sign a petition, to recall their Member of Parliament and hold a by-election?

David Heath: If we make this place properly representative, transparent and accountable, we will be giving power not to ourselves but to the people who send us here. My hon. Friend makes an absolutely crucial point.
	When we have dealt with reform of the Lords and reform of the Commons, we will still have to deal with reform of the political parties. There is the issue of political party funding. I sat on that wretched Committee for so long trying to reach agreement between the parties on the issue. We should have had agreement; it was within our grasp to have proper caps on donations and on expenditure, to reduce the ridiculous arms war in election spending and put things on a sensible footing. We should not give undue influence to people who were prepared to dig deep into their pockets but who always had a price for the support that they were prepared to give.
	What happened? The Conservatives will argue with this, but it is a fact: they walked out, because they did not think the proposal went far enough in terms of trade union funding and affiliation fees—not donations—although they had earlier agreed on that point. Then, those on the Government Benches were too scared to take the proposal forward without the Conservatives, so it was abandoned. What do we have instead? We have the Political Parties and Elections Bill and we have the constitutional renewal Bill, although goodness knows where that is—it is somewhere in limbo at the moment. These are mere mice of Bills; they are horrible little crawling creatures of Bills compared with what is necessary in order to sort out the body politic.
	Let me end on this point. We cannot make our politics work unless people have trust in the political system, and hints at reform are no longer enough. The fact that the Prime Minister asserted when he was first appointed that he was interested in constitutional renewal will not cut any ice with anybody until we start to see delivery. The Bills before the House at the moment are not delivery. Britain needs and deserves better than this—and not just on reforming Parliament. I could go on and talk about empowering local government or about reforming the European Union to make it more democratic and transparent. Those are all important issues, but unless we start the process, our democracy will not be fit for purpose. It is demonstrably not fit for purpose at the moment and there is no better time for us to make a start. I hope that the Deputy Leader of the House, for it is he who will respond, will be able to persuade us that the Government take this matter seriously.

Chris Bryant: I beg to move an amendment, to leave out from "House" to the end of the Question and add:
	'believes that all Members of both Houses of Parliament should uphold the highest standards in public life, should be UK residents for tax purposes and should face the toughest sanctions if they undermine Parliament's reputation; notes that the Government has taken significant steps to strengthen probity in the political system, including the revised Ministerial Code in July 2007 and the appointment of an independent adviser on Ministerial interests and the creation of the independent Electoral Commission; notes the inquiries established by the Leader of the House of Lords; further notes that this House has a clear code of conduct governing hon. Members and has adopted tough new rules on Members' allowances, a new requirement to declare and register any family members employed by hon. Members, a robust new audit system which will see the independent National Audit Office carrying out a full-scope audit of Members' expenditure and a transparent system of publication of details of their expenses; supports the Prime Minister's commitment to further constitutional reform as outlined in the Governance of Britain, including the dissolution and recall of Parliament and the power to declare war and to ratify treaties; notes the pre-legislative scrutiny of the draft Constitutional Renewal Bill by the Joint Committee; notes that the Political Parties and Elections Bill proposes to restrict political spending, bring greater transparency to political funding and strengthen the Electoral Commission as an effective regulator; and hopes that all parties engage constructively in developing a consensual approach to political party finance.'.
	First, I think I speak on behalf of the whole House when I offer an enormous thank you to all members of staff who travelled through the snow to make sure that this building operated properly today. I am glad to be able to tell the House that, starting from 9.45 pm, taxis will be arranged to enable all members of staff to get home safely this evening. We are very grateful to our staff.
	The public want, and have every right to expect, the whole of our legislative process to be clean and above reproach and Ministers to be held to account by Parliament. That is why we should always be vigilant and take the necessary action to prevent any abuse of the system and reassure the public. This Government understand people's concerns, which is why we have taken action to clean up the system and why we are determined to take further action. We should also seek to come together, I believe, across all the political parties on these issues, because no party wins if Parliament is undermined.
	It is vital that we tackle any kind of wrongdoing, but we should, I think, take care not to overestimate the problem, lest we create a self-fulfilling prophecy. After all, although some may believe that all politicians are only out for themselves, many none the less hold their own Member of Parliament in very high regard. Although we MPs may be rated only marginally higher for honesty than estate agents, we still beat tabloid journalists by a good 10 percentage points.
	I believe that an element of scepticism about politicians is a very good thing. We are a naturally sceptical country. We distrust absolute power; we value freedom of speech; and we love scabrous satire. If anything, British scepticism helps keep us honest.

John Redwood: Does the Minister think that the Government would be more trusted if, after offering a referendum, they had actually granted one?

Chris Bryant: I think the right hon. Gentleman is returning to the issue of the Lisbon treaty and Europe. Tempting though it is, I am sure that you, Mr. Deputy Speaker, would rule me out of order if I referred to a subject that was not on the Order Paper.

John Bercow: There is little doubt that fundamental reform of the expenses system is required, as discussed recently, and that it has to incorporate audit, transparency and accountability. On the Minister's theme of not knocking everything, however, does he agree that robust reform of that system needs to be accompanied by a robust defence of the legitimacy of a decent allowances system, with proper tribute paid to the late Robin Cook for improving it in such a way that we can effectively cater to the needs of our constituents?

Chris Bryant: The hon. Gentleman is absolutely right. I am very conscious that the first Member of Parliament for the Rhondda was a man called William Abraham—or Mabon, as he was known. I have a letter from him thanking the local trade union for paying his expenses while he was in Parliament; otherwise he would have had no means of being able to represent the people of the Rhondda, because he was not a wealthy man. It is vital that what I prefer to call our expenditure is properly met so that we can do the full and proper job that today's constituents expect of us. The days when an MP could visit the constituency irregularly and not bother to reply to letters are long gone—and quite rightly so.

Andrew Smith: I agree with my hon. Friend about the value of reform, but I invite him not to take too much comfort from and not to be complacent about the spirit of the intervention that he just answered. As far as many of our constituents are concerned, the integrity of Parliament would be accorded much greater respect if the whole question of pay and allowances were taken totally out of the hands of MPs so that we were unable to vote on what we should receive.

Chris Bryant: My right hon. Friend makes a very good point about our pay and our salary. As he will know, last year, with cross-party support, we agreed that that decision should no longer be made by us—that it should not be for us to determine our own pay. In future, it will be done in conjunction with the reports of the Senior Salaries Review Body. It is important that there is that degree of independence.

Kelvin Hopkins: A little while ago, my hon. Friend said that the British people do not like politicians having too much power. I agree with him. Is it not the case that our Prime Minister has more power than almost any other comparable Prime Minister in Europe and that one way of reducing it and making it more acceptable would be to get rid of his powers of patronage now? If our Prime Minister said that, from now on, he was not going to use his powers of patronage and that the system would be reformed, would it not be a great gesture that the British people would appreciate?

Chris Bryant: My hon. Friend will know that when my right hon. Friend became Prime Minister, one of the first things he did was to publish "The Governance of Britain", which made it very clear that there were large areas where the Crown traditionally held power, which could be dealt with more appropriately by Parliament. That is part of what we will want to achieve when we introduce the constitutional renewal Bill. I think it is difficult to remove every single element of power and patronage from the Government because part of exercising power is trying to ensure that it works in the interests of the whole community.
	The demise of the age of deference has not, of course, affected only Parliament; other British institutions have suffered, including the Church, the trade unions, very notably the BBC, the police and even the armed forces.
	There are also elements of our political system in which we can take genuine pride. This Chamber, for instance, is one of the most critical arenas of any political assembly in the world in which to advance an argument. At times, we may be too rumbustious and the public are perplexed by why we have to confront each other so aggressively, but the truth is that no British Prime Minister can avoid having to put his or her arguments to the test. Nor, for that matter, can a Minister saunter along the corridors of power unquestioned.
	This Government have strengthened many of our parliamentary traditions. Tony Blair made Prime Minister's questions a weekly half-hour occasion rather than a twice weekly 15-minute session, and volunteered to appear before the Liaison Committee. Few Heads of Government around the world have to submit themselves to such a rigorous grilling, having to face questions on literally any subject unannounced every week.

Christopher Huhne: Given that the Minister is making a very compelling case for Ministers appearing before Parliament, will he include in the constitutional renewal Bill proposals to ensure that Secretaries of State sitting in the other place are allowed to present their proposals here and be questioned by us?

Chris Bryant: I am not sure a Bill is the precise way of advancing such a suggestion. It might be possible—indeed, it might make more sense, because one would be changing the traditions of the House—if such a proposal were advanced by the whole House. I am not saying that I entirely oppose the hon. Gentleman's suggestion. Indeed, if he looks back at questions that I once asked when sitting next to my hon. Friend the Member for Thurrock (Andrew Mackinlay), he might see something that would interest him.
	Ordinary oral questions to Ministers and our tradition of allowing interventions in speeches, which I have not noticed in any other Parliament, mean that those in power are held robustly to account. Only last year, we made that regime even tougher by introducing topical questions, thereby allowing Members to ask Ministers completely open questions on any subject. I think that all hon. Members would agree that that has been a significant innovation.

Evan Harris: Will the Minister reflect on the House's legislative powers? He knows of the widespread concern about hon. Members' inability to seek to amend and debate major Bills' new clauses and amendments on Report. We shall consider two criminal justice Bills that contain nearly 10 parts on average. We will never get through 10 groups of amendments in a day. As a measure of his and the Government's commitment to parliamentary scrutiny of the Executive, will he ensure that there is enough time to debate all those groups of amendments?

Chris Bryant: The hon. Gentleman has asked me that question before, and, doubtless, he will ask me it again. I will try to give the same answer as I gave last time. The truth is that the most important thing that the Government can do is not to introduce Bills until they are thoroughly prepared, to ensure that they do not suddenly choose to introduce additional elements to Bills halfway through their progress—in particular, to Bills that look somewhat like Christmas-tree Bills—and to make sure that the amendments that they table are genuinely concessionary and meet the concerns that Opposition or, indeed, Government Members raised in Committee. It is also true that we sometimes need additional time to fulfil the duty of scrutiny for Bills on Report. That is why, for instance, the next major Bill that is coming up for consideration on Report is the Political Parties and Elections Bill, for which we have allowed two days on Report.

William Cash: There must be a degree of consensus in the House that reform of the House, let alone of Parliament as a whole, is necessary. Does the Minister agree that we should tackle the Whips' system? Although the system may be necessary, it is overused. In particular, on questions that relate to consideration on Report or in Committee, more free votes would enable, if enforced by Standing Orders, Members of Parliament to express their opinions. Ultimately, the final debates on a Bill could be whipped in accordance with the manifesto.

Chris Bryant: The hon. Gentleman makes a point that I have often heard. Clearly, there are occasions when, by tradition, all the political parties have offered free votes, particularly on matters of conscience. However, I have a majority of 16,000, not because I am such a wonderful person that the people of the Rhondda suddenly decided that they would vote for me. The truth is that the vast majority of them vote Labour because they have done so historically and they want a Labour Government, given that they know what a Tory Government would do to them. Consequently, it is incumbent on me often to support my party, because that is what my voters want me to do. Those who argue that every vote should be a free one or who want to weaken the Whips' system do not understand that countries with a very weak system often have the worst pork barrel system of politicking.

John Bercow: I am grateful to the Minister for giving way; he has been generous in doing so. I agree that, so far, the introduction of topical questions has been of benefit to the House, but they should not be distorted or polluted by the continued interference of Opposition Front Benchers in the process. In my view, topical questions should be principally, if not exclusively, for the benefit of Back Benchers to challenge the Government.

Chris Bryant: The hon. Gentleman makes a point that was made in the original Committee report that suggested topical debates and topical questions; they were intended to enable Back Benchers to have more time and more opportunity to question and scrutinise the Government. As some Opposition Front Benchers have not wanted to give notice of what their questions will be about, they have chosen only to ask topical questions, thereby sometimes crowding out Back Benchers. However, Mr. Speaker is very keen to ensure that Back Benchers have their fair crack of the whip.

Richard Younger-Ross: One of the issues that comes up in the House from time to time and at Question Time when the Minister or the Leader of the House is answering is the time that it takes for written questions to receive a reply. Some Departments manage to answer 80 per cent. of questions on the named day; other Departments—for instance, the Ministry of Defence—manage to answer only 20 per cent. on the named day. Respect for the House will help to generate respect outside the House, and the hon. Gentleman could deal with that matter himself.

Chris Bryant: The hon. Gentleman raises an issue that I want to tackle, and I am very keen to ensure that, where pinch points exist in individual Departments, hon. Members receive swift and full answers and that every Department lives up to the highest standards that we all expect and, indeed, that the ministerial code of conduct lays down. I should point out that my Department has a 98 per cent. record.
	We have also strengthened Parliament with pre-legislative scrutiny of Bills and with evidence sessions before the line-by-line consideration of a Bill starts in Committee, and there will be post-legislative scrutiny soon as well. Similarly, the Government have taken significant steps to improve probity and transparency in our electoral system. The Government created the independent Electoral Commission. We banned foreign donations. We required every Member of Parliament to declare any gift or donation above £1,000 that he or she receives. The public can see that information listed on the Electoral Commission's website. That is on top of the House's own requirement to register any financial interest worth more than 1 per cent. of a Member's salary. We also required local political parties to declare any contribution of more than £1,000 and national parties anything over £5,000. We required loans to political parties to be declared. We introduced a toughened ministerial code of conduct and an independent adviser on Ministers' relevant interests.

Gordon Prentice: Given what has been reported over the past few weeks, should we not embrace the Public Administration Committee's suggestion and introduce a mandatory register of lobbyists, giving details of the lobbyist and those whom they are lobbying?

Chris Bryant: My hon. Friend makes an interesting suggestion, but it is important to understand what counts as a lobbyist, not least because one of our constituents' ancient rights is to come to the Lobby and demand to see us as their Members of Parliament. Obviously, nothing should undermine that, but my colleagues will want to reflect on the interesting point that he makes.

Christopher Huhne: I am grateful to the Minister for giving way again. Given that a substantial amount of the Government amendment is obviously welcome, given that there is a consensus across all parts of the House about the importance of electing the House of Lords and given the events of the past few weeks, is he prepared to make a commitment to introduce election to the House of Lords in the forthcoming Bill, particularly given that the Queen's Speech contains only 14 Bills this year and that there is plenty of parliamentary time to discuss and pass them?

Chris Bryant: The hon. Gentleman will have to wait to hear what I say a little later in my speech, when I come to those issues.
	All the things that the Government have done have been vital, because the truth is that, although the instances of wholesale corruption are blessedly rare in the United Kingdom, we should never be complacent about the body politic. Equally important is the reputation of Members of Parliament—vital to the golden thread of trust between the Government and the governed and between the elected representative and the citizen. The public rightly expect those who are in a position of trust to exercise their duties without fear or favour and with sole regard to the common good. As this House's code of conduct puts it,
	"Members shall base their conduct on a consideration of the public interest, avoid conflict between personal interest and the public interest and resolve any conflict between the two, at once, and in favour of the public interest."
	This House has a robust disciplinary process, with an independent Parliamentary Commissioner for Standards and the Standards and Privileges Committee, whose Chairman is with us this evening. Only two weeks ago, the House agreed to tough new rules on our own expenditure, a tougher system of audit including a full-scope audit by the National Audit Office of all Members' expenditure, and a far greater degree of transparency regarding our expenditure than we have ever had before.
	Let me now turn to the rules governing the House of Lords, particularly in the context of the allegations made last week in  The Sunday Times. The Leader of the House of Lords, Lady Royall, has acted swiftly. She has referred the allegations to the Sub-Committee on Lords' Interests for a swift and rigorous investigation. In addition, as she told the House last Monday, she has asked the Chairman of the Committee for Privileges—the Chairman of Committees, Lord Brabazon of Tara—
	"to consider any issues relating to the rules of the House that arise, especially in connection with consultancy arrangements, and in connection with sanctions in the event that a complaint against a Member is upheld."—[ Official Report, House of Lords, 26 January 2009; Vol. 707, c. 10.]
	As was pointed out by the hon. Member for Somerton and Frome (Mr. Heath), the Lord Chancellor has also said:
	"We want to see very, very clear laws brought in that deal with misconduct by members of the House of Lords so that if they commit a criminal offence or something else which is wholly improper then they can be expelled".
	He has made clear that that should also apply to those who are not resident in the United Kingdom for tax purposes.

Andrew MacKinlay: If I catch the Speaker's eye, I shall develop the theme of how disappointingly conservative the Labour Government have been on constitutional reform. I buttress that by drawing my hon. Friend's attention to the fact that the late Robin Cook gave me an undertaking at the Dispatch Box that they would address the question of Members of the House of Lords who had been in prison, and it did not happen. That is the reason for my disappointment, my frustration and my charge against the Government tonight: they say one thing, and never do it. It is time that my hon. Friend broke that pattern, and said that we will have legislation immediately to address the problem.

Chris Bryant: I remember my hon. Friend challenging Robin Cook when he was Leader of the House, and also saying that it would be wrong merely to clear up a couple of instances in terms of Lords reform—

Andrew MacKinlay: I did not say that.

Chris Bryant: I think that my hon. Friend did. If he did not, it was someone sitting in the seat where he is sitting now who argued that it was important that we should not undermine possible future substantial reform of the House of Lords by merely dealing with the de minimis elements that Lord Steel, for instance, would like to introduce in his Bill. I merely point out to the hon. Member for Somerton and Frome that although he agrees with some elements of Lord Steel's Bill, it says absolutely nothing about elected peers.
	I should also say this to the hon. Member for Somerton and Frome. He said that the views that he quoted had come from the Lord Chancellor entirely out of the blue. In fact, the White Paper on House of Lords reform, published last July—the hon. Gentleman may have had time to read it by now—makes it clear that we would like to change the rules on disqualification, and that we would like to put the Appointments Commission on a statutory basis.

David Heath: That is precisely the point: putting it in a White Paper does not make it so. We want it in legislation. I am afraid that the Deputy Leader of the House sounds dangerously complacent when he simply says that things might be done at some stage in the future without giving a commitment to make them happen now.

Chris Bryant: We want to make these things happen, and we will present proposals to do precisely that.
	I think that the hon. Gentleman also underestimates the desire of most people in this country to see major constitutional reform happen as far as possible on a cross-party basis, with as much consensus as possible. I pay tribute to my right hon. Friend the Lord Chancellor for achieving precisely that.
	The hon. Gentleman said that there had been interminable meetings. I sat on the Joint Committee on House of Lords Reform, and those were pretty interminable meetings, but the truth is that this is a goal that the hon. Gentleman's party, when in government, espoused back in 1911, and these are measures that we want to pursue. We want to build on the Government's White Paper on Lords reform, published last summer, which outlines our commitment to a wholly or substantially elected second Chamber, to a statutory appointments commission for any appointed peers, and to introducing the system that applies in the House of Commons and automatically disqualifying a Member of the second Chamber who is convicted of a criminal offence and sentenced to more than 12 months' imprisonment.

Simon Hughes: rose—

Chris Bryant: I give way to the hon. Gentleman's predecessor.

Simon Hughes: I think that there is a clear majority across all parties in favour of what the Deputy Leader of the House has sought to do, which is to reform the House of Lords and make it either wholly or substantially elected. I see no reason, from the point of view of this House, for that not to happen in the current Parliament. I ask the Deputy Leader of the House to convey to his colleagues that if they were to allow that proposal to take up some of the time in the current Session, they would have the full support of the Liberal Democrats and, I suspect, significant support from the other two parties, so that we could get it through at least for the first time in this Parliament.

Chris Bryant: It is also worth pointing out, however, that legislation has to go through two Houses, and that is a different matter. I heard the right hon. Member for Berwick-upon-Tweed (Sir Alan Beith)—who chairs a Select Committee—say earlier that this was the primary House, but I think the second Chamber would have significant views on the matter of Lords reform.

Richard Younger-Ross: rose—

Chris Bryant: I have allowed a great many interventions and I am keen to move towards the end of my speech, but I will give way.

Richard Younger-Ross: The fact that ermine is an addictive substance does not mean that we should not try to get rid of it in this House.

Chris Bryant: I remember Lord Howe saying that he did not want an elected second Chamber because he did not want clones of the clowns—referring to us as the clowns. All that I thought at the time was that it was particularly sad that a former clown should have so changed his mind.

Chris Mullin: Does my hon. Friend agree that it would be fatal to many of the sensible proposals made by the hon. Member for Somerton and Frome (Mr. Heath) to link them to the question of elections? The reason reform of the House of Lords has eluded us for 100 years is that we keep opting for "big bang" solutions rather than concentrating on the issues on which we all agree.

Chris Bryant: I think that my hon. Friend is at least two thirds right. It is important to proceed in a way that carries a large body of opinion. However, there comes a time when one must declare whether one is in favour of a wholly appointed Chamber, as some Members of this House are, whether one believes that there should be no second Chamber, as others do, or whether, like me—as my hon. Friend knows, I have argued this for as long as I have been in the House—one supports a wholly or substantially elected second Chamber. The difficulty, late in a Parliament, lies in ensuring that that agenda can be taken forward.

David Taylor: My hon. Friend is a recent adornment to the Front Bench. I am very pleased that he was appointed to be part of the Government, but he did enter the House a little later than most of us, and he will not recall that we were being told in those first years that now—or, rather, then—was not the time for Lords reform. A time would come, and we would know when it was. Now we are being told that it is too late. What has happened? Why has my hon. Friend lost his radicalism in his transfer from the Back Benches to the Front Bench?

Chris Bryant: I merely say that I want to see reform of the House of Lords. I do not want to squander through impatience the opportunity that exists; nor, for that matter, do I want fear of radicalism so to infect us that we do not advance reform.
	Action is vital in this area. As Lady Royall pointed out in  The Guardian last week,
	"it is obviously wrong—wholly wrong—if what peers do to earn a living warps their work as parliamentarians".
	As she also said, in the House of Lords,
	"We in this House have a responsibility to adhere to high standards, and we have to ensure that we adhere to those high standards in order to ensure that there is trust in the whole of our parliamentary process."—[ Official Report, House of Lords, 26 January 2009; Vol. 707, c. 11.]
	It is the whole of the parliamentary process that matters here, and the Government stand ready to act.
	Of course, as the hon. Member for Somerton and Frome himself said, our constituents are primarily concerned about their families, their homes and their jobs; but they also want to be as certain as possible that, in the words recited every day by the Speaker's Chaplain, we, as Members of Parliament,
	"lay aside all private interests and prejudices"
	and simply
	"seek to improve the condition of all mankind".
	They want to know that Parliament is entirely focused on the sole purpose of the common good. That is why in every era we need to restate our high ideals. When the Nolan Committee produced its report in 1995, it pointed to seven principles that it saw as vital in public life and that have since been included in the code of conduct. They are worth repeating—selflessness, integrity, objectivity, accountability, openness, honesty and leadership. It is also why Parliament must always be ripe for reform.

Shailesh Vara: There can be no doubt on either side of the House that both Houses of Parliament need to be reformed urgently and brought up to the standards of the 21st century. As servants of the people and as legislators, we must set an example in all our doings—in our dealings with taxpayers' money, in the way we do business in Parliament and in the way in which we operate and work within the political process.
	Parliament and parliamentarians have come in for much criticism recently, and it is vital that we address those concerns head on. Public confidence in politicians—by which I mean parliamentarians, Members of the European Parliament and local councillors—is at an all-time low, as is confidence in our political institutions. Let there be no misunderstanding: the current malaise is not a passing fashion or a temporary aberration of the political process. It is a matter of very serious concern, and it should be a source of concern for all politicians.

Simon Hughes: The hon. Gentleman is right to say that we have much to do to earn the respect of the public, both here and locally. However, will he accept that there are some encouraging signs that, at local government level, there is much greater satisfaction with certain councils than there has been for many years? I am not making a party political point, because that applies to councils run by all parties. As the Deputy Leader of the House said, there is often considerable satisfaction with individual Members of Parliament and their performance. While the hon. Gentleman is right to encourage us, I hope that he will not downplay the progress and support that exists in many places.

Shailesh Vara: The hon. Gentleman makes two valid points. While there are many well-meaning councillors and much is being done that is worthy of credit, let us not delude ourselves. It does not take much for local councillors to acquire a bad reputation, especially when it comes to postal votes and the rigging of them. I shall come to that issue later. The hon. Gentleman also mentioned individual Members of Parliament, and it is fair to say that the vast majority do their work as diligently as they can, they claim their expenses honestly and fairly, and they should have nothing to worry about. It is only a small number who earn the bad reputation that we have, and we must address that.

Kelvin Hopkins: I agree strongly that there is a danger that Parliament is held in disrepute by the electorate, and that is a serious danger because it is when external forces—the street—take over. We are not far away from such a situation now. Indeed, we saw such a situation today when those on the three Front Benches were all patting each other on the back and agreeing about the particular economic model that has caused the problem. Does the hon. Gentleman agree that differences in Parliament are healthy for democracy? When those on all the Front Benches speak the same language, that is not good for democracy.

Shailesh Vara: I have news for the hon. Gentleman. The hon. Member for Somerton and Frome (Mr. Heath) mentioned keeping this debate consensual and said that he did not wish to make it partisan, but I am afraid that I will break rank with that particular pledge. I have certain issues to address, and I will not be taking the side of the Liberal Democrats.
	It cannot be right that we expect individuals and organisations outside to show openness and transparency in their dealings with public finances, but that we should seek to draw a veil of secrecy when it comes to public money being dealt with by parliamentarians. We must have full transparency in all our dealings with money, and proper accountability for all that we do in our role as parliamentarians. By doing so, we may make some progress. The hon. Member for Luton, North (Kelvin Hopkins) said that confidence was at a dangerously low level, but I hope that if we make reforms we will be able to regain some of that respect and confidence, both for ourselves and in the political system.

Kelvin Hopkins: Some good research shows that the only thing that correlates with low and decreasing turnout at elections is the growing similarity between the philosophies of the political parties. That is a fundamental problem that we have not addressed, and it is up to the parties, as much as Parliament, to do something about it. Does the hon. Gentleman agree?

Shailesh Vara: I certainly believe that there is a fair amount of difference between the parties, but we will have to wait until the manifestos are produced for the general election. It will be for the electorate to decide not only which party they wish to support in policy terms, but in which political group they have the confidence to run the country properly. It is not only an issue of policies, but of the public judging our characters and who is best to serve the country.

David Taylor: Approving remarks have been made about the new standards regimes in parish councils and elsewhere as a possible model for reform here, but does the hon. Gentleman agree that some of those standards boards have become a way for people in a local community to grind axes and pursue vendettas? Some of those boards are over the top. The Secretary of State for Health, with a budget of £100,000 million, has much less responsibility for standards than does the chairman of a parish council with a budget of £10,000. The whole thing is out of kilter.

Shailesh Vara: The hon. Gentleman makes some valid points. When he talks about the standards boards, it is important to recognise that some local councillors are unfairly penalised. For example, a complaint can be made against a parish councillor who, in order to prove his innocence, will have to incur costs of a few thousand pounds, simply for being a good citizen and trying to do the best that he can. Let us not forget that there are issues in local government that need reform. We need to consider the matter of local councillors not being able to vote on planning issues if they declare their views. They have an enormous problem in that they cannot effectively speak up for their constituents if they cannot say where they stand publicly.
	The hon. Member for Somerton and Frome said that he hoped that we would all speak with the same voice, but if a political party tables a motion like the one that the Liberal Democrats have tabled, it is worth putting on record their inconsistency and examining how they have behaved in ways totally contrary to the way in which they expect the rest of us to behave.
	For example, the motion speaks of
	"the need for urgent action to restore the trust of the British public in Parliament as an institution and in politics as a profession",
	but this is the party that has taken £2.4 million from a convicted criminal. The Lib Dems talk about trust in parliamentarians, but that man gave them money from a fraudulent company that never traded. He did not live in Britain, and he was not allowed to vote here. What happened to the due diligence that one would expect from anyone taking such a huge sum of money? So much for due diligence.

David Howarth: All the problems that the hon. Gentleman mentions would be completely got rid of if his party were to accept the £50,000 cap on donations. Will he accept that proposal now?

Shailesh Vara: I suggest that the hon. Gentleman does his homework a little better in future before he makes an intervention. He should be aware that it was my party that suggested, a long time ago, that there should be a cap of £50,000 for individuals, companies and organisations. It was not accepted because the governing party did not want to put a cap on trade union donations.

David Howarth: Will the hon. Gentleman give way?

Shailesh Vara: I have given way to the hon. Gentleman and he will have an opportunity to speak later.
	The Lib Dems speak of restoring
	"the trust of the British public in Parliament...and in politics as a profession."
	Let us consider the idea of the Lib Dems talking about trust in British politics. On page 21 of their campaign document, "Effective Opposition", produced by the Association of Liberal Democrat Councillors, it says:
	"Be wicked, act shamelessly, stir endlessly."
	On page 23, it says:
	"Don't be afraid to exaggerate. For example, responses to surveys and petitions are always 'massive'. If a council is doing something badly public expressions are always of 'outrage'",
	and on page 4, it states:
	"Positive campaigning will NOT be enough to win control of the council."
	On page 6, it says that
	"you can secure support from votes from voters who normally vote Tory by being effectively anti-Labour and similarly in a Tory area secure Labour votes by being anti-Tory."
	It goes on to say:
	"Oppose all service cuts...No cut is going to be popular and why court the unpopularity that goes with the responsibility of power".
	Finally, the document— [ Interruption. ] I see that my reminder to the Lib Dems of their campaigning tactics is too much for the hon. Member for Somerton and Frome, who moved the motion, because he has had to leave the Chamber. It is a pity. I presume that he knows it already, and that was why he felt it necessary to leave.
	On page 33—I am coming to the end of my quotations from this document—it states:
	"You are NOT running the council. It's NOT your problem."
	At the last elections—the London elections—the party that has so graciously tabled the motion decided to break the rules. In December 2008, Ofcom ruled that the Lib Dem London mayoral television adverts were in "extremely serious breach" of guidance outlined by the Broadcast Committee of Advertising Practice. Indeed, the television companies were fined a total of £40,000 and it was later revealed that the Lib Dems could have been breaking Electoral Commission rules by not declaring the adverts as donations in kind.
	It is important to put on record all that I have just said because it highlights the inconsistency between a party's putting forward such a motion and the practice on the ground.

Simon Hughes: I cannot possibly deal with all the points that the hon. Gentleman made. However, I make it absolutely clear, as someone who had some responsibility for the first matter that he raised, that we would never have taken a donation from anybody who at that time had a criminal conviction. The conviction followed much later. The party carried out all the due diligence tests and the Electoral Commission confirmed that we had done so.

Shailesh Vara: A quick look at the electoral register would have highlighted that the individual concerned did not vote in this country. A quick analysis of the situation would have determined that the individual was not resident in Britain. A simple search of a company or two would have confirmed that the company did not trade. That alone, I would have thought, would have raised alarms to an average amateur in politics. However, I hear what the hon. Gentleman has said. He has put it on the record, and I have put my comments on the record, too.

Clive Efford: I feel like I am intruding on private grief, but let us put the record straight. Will the hon. Gentleman tell the House what he thinks the incentive would be for somebody who is not registered for tax purposes in the UK to fund a political party and seek to influence the outcome of elections? What would be the incentive for a political party to accept such a donation?

Shailesh Vara: The hon. Gentleman raises a very important point about overseas issues. He will, of course, be aware that the noble Lord Paul, who more or less agreed to underwrite the general election campaign that never was about a year or so ago, is non-domiciled. I accept that overseas issues to do with Members of the other Chamber cut across both sides of the House. That needs to be looked at. I suggest that he refrains from trying to score cheap political points and perhaps does his homework a little bit in future.

Kelvin Hopkins: Will the hon. Gentleman make a good start by sending back the Ashcroft cheques now?

Shailesh Vara: I suggest that the hon. Gentleman refer to the answer that I just gave. He might like to review the enormous sums of funds that have been given by the noble Lord Paul to his party.

Mr. Deputy Speaker: Order. I think we have had a pretty good run around the course now. I would be happier if the hon. Gentleman concentrated on the terms of the motion and the amendment.

Shailesh Vara: I agree entirely, Mr. Deputy Speaker. I was simply addressing some of the questions raised by hon. Members.
	Clearly, the upper Chamber is in need of urgent reform in terms of both accountability and composition. The Opposition support a substantially elected upper Chamber. People who legislate for the people should have the mandate of the people on whose behalf they legislate. That should be a guiding principle. Of course, it is important that we take an urgent look at the financial aspects that apply in the other place. Incidentally, may I put on the record the fact that my colleague, the noble Lord Strathclyde, leader of the Conservatives in the upper House, has been a vocal proponent of Lords reform for a very long time?
	When addressing electoral reform, we must also consider the issue of Members of the European Parliament.

John Bercow: My hon. Friend will know that I share his belief that we should have a wholly or substantially elected second Chamber. Did he share my disappointment that the Deputy Leader of the House gave as a reason not to proceed too quickly on Lords reform the fact that the other House would have strong views about it? Surely the point is that the Lords will always have a view about it and we should not put off until tomorrow what could and should be done today.

Shailesh Vara: I hear what my hon. Friend says. Clearly, the other House will have views. We need to listen to those and move on rather than putting such matters into the long grass, which is what has been done by the Government so far.
	I turn back to the issue of Members of the European Parliament.

Simon Hughes: On the issue of Lords reform, if the Government were persuaded that this Parliament was the time to legislate for a wholly or substantially elected House of Lords, may I take it from what the hon. Gentleman and his colleagues have said over the past months that the Conservative party would support it?

Shailesh Vara: My party is in favour of a substantially elected House of Lords. We need to go through the process and when that happens we will support what we have voted for in the past in this Chamber.
	On the third attempt, let me turn to the issue of Members of the European Parliament. We need to extend reform to that institution and those individuals, too. We have started the process and have produced a full list of the breakdown of our MEPs' expenses as part of our commitment to transparency and openness in public life.
	If we are to regain the public's trust, we must make changes to the way in which political parties are funded. For our part, we have put forward a comprehensive set of radical proposals for party funding. As I said, at the centre of them is an across-the-board cap on donations of £50,000 a year, covering individuals, companies and trade unions. It was unfortunate that the Government decided that they would not go with that proposal, but that was hardly surprising given that some £12 million was given to the governing party last year by trade unions and that since 2001 the Labour party has received some £75 million from trade unions.

David Howarth: I thank the hon. Gentleman for coming back to this topic. May I take it that he is committing his party to voting for the Liberal Democrat new clauses on the £50,000 cap and on the trade union matter when the Political Parties and Elections Bill comes back to the Chamber next week and the week after?

Shailesh Vara: The answer to that question will be given by whoever is at this Dispatch Box when that Bill comes before the House. I shall certainly not give the hon. Gentleman an answer to a question on a future debate; I would much rather concentrate on the motion that he and his party have tabled in the debate at hand than discuss matters that are not on the Order Paper at the moment.
	It is important that the integrity of Parliament should be taken on board by all of us. It is not only the issue of finance that brings this place into disrepute; it is also the way in which politicians and Parliament operate. For example, if a party gives a manifesto pledge to hold a referendum on the European Union constitution, that party—the Labour party—should honour that pledge when it is elected back into government. It demeaned the Prime Minister and the office that he holds when he said that the Lisbon treaty was a different document. This was particularly highlighted by the fact that many of his European Union counterparts said that the Lisbon treaty was a European constitution in all but name.
	As well as ensuring that there is proper accountability in the House, we must also ensure that any announcements are made in this House first, and not announced on the "Today" programme or leaked to the newspapers. That issue comes up regularly at business questions, and the Leader of the House gives us many assurances—as have her predecessors—that she will take it on board and pass it on to her Cabinet colleagues, yet we still find that, week in and week out, announcements are made outside the House rather than here, where Ministers can be held to account by the parliamentarians who were elected to hold them to account.
	The matter of written parliamentary questions was raised in a point relating to the consistency and timing of replies to those questions. I suggest that the issue of proper answers should also be addressed. It is absurd for the Government to give answers such as, "We do not hold the information in the format requested." If that is the case, they should give the information in whatever format exists, rather than withholding the information completely. The former Leader of the House, now the Secretary of State for Justice, often said that one of the problems was that too many questions were being tabled. But if the questions were answered properly in the first instance, there would be no need for the huge number of supplementaries that have to follow. It is bad enough that written questions do not get proper answers, but it is even worse now that the Government simply do not bother to give any answers at all. At the end of the 2007-08 parliamentary Session, nearly 500 questions, which had been tabled for more than a month, received no reply at all—not even the usual Prorogation reply.

Andrew MacKinlay: Does the hon. Gentleman share my view that it is appalling that there is an industry of planted questions? Will he give the House an undertaking that those on the Conservative Front Bench do not do that, or that, if they do, they will stop it? This industry of planted questions being hawked around every day is a debasement of Parliament, and it denies the people who are the architects and authors of their own questions the opportunity of succeeding in getting them on to the Order Paper.

Shailesh Vara: The Conservatives certainly do not do that, because we are not in government and we do not have to take questions every day, as Ministers do. The point that the hon. Gentleman makes was highlighted when, during Prime Minister's questions, the Prime Minister stood up and started to answer a question before the Labour Back Bencher had even asked it. The question had clearly been planted, and the Prime Minister clearly knew the answer. That gave away the tactics with which this Prime Minister operates.
	It is also important that Parliament exercises proper scrutiny over legislation that comes from Brussels. My right hon. Friend the Member for Maidenhead (Mrs. May) has made proposals on this, including strengthening the European Scrutiny Committee and giving it the power to force a debate and a vote on a motion, and placing on a statutory basis the convention that Ministers must gain parliamentary approval before agreeing a decision in the Council of Ministers.
	It is important to bring the integrity of the ballot up to 21st-century standards. There is some merit in the Electoral Commission's recent warning that Britain's system of elections was designed for the 19th century and not for the modern world. Who can forget Judge Richard Mawrey's comments in 2005, when he found two Birmingham city councillors guilty of being involved in ballot rigging and postal vote fraud? He spoke of
	"election fraud that would disgrace a banana republic".

John Bercow: I absolutely understand that, in talking about the integrity of the ballot, my hon. Friend referred to public elections, which are very important. On the subject of the integrity of the ballot, and the entitlement to elect, does he agree that the House should have the self-respect and self-confidence to elect its own Select Committees, a commitment made by my right hon. Friend the Member for Witney (Mr. Cameron) some years ago?

Shailesh Vara: I certainly know that there has been an abuse of the election of a Chairman of a Select Committee, when the chairmanship of the Home Affairs Committee was forced through in the House, rather than the right hon. Member for Leicester, East (Keith Vaz) being elected by fellow Select Committee members.

William Cash: In relation to the scrutiny of European legislation, does my hon. Friend agree, especially given the strikes that we are facing in the United Kingdom, that when European law is trapped by its own system into having the European Court of Justice make decisions that cannot be reversed, it is vital to our national interests to reassert the supremacy of our own Parliament and require the judiciary to obey the latest relevant Act of Parliament? The Conservative party agreed to that proposition when it supported my amendment to the Legislative and Regulatory Reform Bill two years ago.

Shailesh Vara: It is important that we are the final arbiters of which rules are used to judge us. That is why we should have the final scrutiny of such issues and, as my right hon. Friend the Member for Maidenhead has proposed, the right to vote on specific motions.
	It is a privilege to be in this House, and we have chosen to put ourselves forward to be here. If we do that, we must accept that 21st-century standards require proper accountability and proper transparency over funds. We should conduct our affairs in a way that inspires confidence in what we do, rather than derision. There has been much debate—and many words—on this subject in recent months, and the time has now come for us to stop talking and to start doing something about it.

Several hon. Members: rose —

Mr. Deputy Speaker: Order. There is a general consensus, for reasons that we all know about, that the debate should come to an end at 9 o'clock. There is therefore a limited amount of time left, and a lot of hon. Members are seeking to catch my eye. If they could tailor their remarks to the time remaining, that would be extremely helpful.

Graham Allen: There cannot be a Member of this House who does not know that Parliament—and this Chamber in particular—needs to recapture its relevance to this day and age and to our politics. There can be few Members who do not also agree that Governments need to understand that they have everything to gain and nothing to lose by helping to build a strong and effective Parliament to help them to do their business. The present relationship of dominance and subservience between the Executive and the legislature serves neither institution well. I make no distinction here between the parties. Whether Conservative, Labour or Liberal, all the parties have been equally at fault over the years, either as abject parliamentarians or overbearing members of Government. All of us share the responsibility, and all of us need to help to find a way forward.
	The Executive rule without test or challenge, and the legislature adds little or no value. That is a bargain that cheats not only those players, but the public, who expect better of us and clearer benefits from our democracy. Business as usual will not be good enough, and neither will yearning after some golden age when Parliament and Britain ruled the waves. Those days—if ever they existed—are long gone, and we now need to work together to find a way forward to ensure that our Parliament and politics are relevant to people. There needs to be a new settlement, and one that commands support across the whole political spectrum. Under such a settlement, the Government would maximise Parliament's contribution and Parliament would respect the need of Government to pass their laws after a process that, I hope, would improve them.
	We should honestly recognise that the unbalanced relationship between Parliament and Government lies at the core of this debate. If we realise that, we can soberly and in partnership improve the interaction between those two great institutions. If we do not, we will divert into tinkering with minutiae, which has typified our debates on this subject over the years. MPs sometimes pretend that they run the country; Governments sometimes pretend that they lead a healthy democracy. If we can consign those self-delusions to the rubbish bin of history, we will at least have a chance to restore public respect and interest in our democracy and Parliament, to improve government and governance in the United Kingdom, and to recreate the respect not only for Parliament as an institution, but for MPs as important individuals with a central and serious contribution to make.
	Our democracy will function much better if we can grow out of the "winner takes all" fixation. Virtually all other western democracies have healthy and lively partnerships between their Executives and legislatures—a real separation of powers that enables debate from independent positions and reconciliation between institutions whose representatives have the interests of their people and nation uppermost in their minds.

Kelvin Hopkins: I agree entirely that we should raise the status of Parliament and redress the balance with the Government. Recently, I was at lunch with a Danish politician, who said, "We have proportional representation in our country; we have a strong Parliament and a weak Government—you are the other way around." I support the first-past-the-post system, but how does my hon. Friend propose to strengthen Parliament without some arrangement of that kind?

Graham Allen: I do not think such an arrangement necessary; willpower is the most important thing that we need in this Chamber. As was mentioned earlier, we also need the self-confidence to take the responsibility. I do not propose that the monopoly politics that the Executive have enjoyed should somehow be shifted over so that Parliament has a monopoly position. Gladstone got it right when he said that the role of the House was not to run the country, but to hold to account those who do.
	Again, there can barely be a Member who feels that we have held that baton of accountability tightly. We have dropped it and it has often been picked up by the media, particularly the "Today" programme and "Newsnight"—and thank goodness for them on those occasions. However, we in the House should seize back that baton of accountability and work in partnership with the Government to ensure that our Parliament and Government work better for the future of our democracy.
	To make that a reality, we could look again in a number of ways at what we do in this place. For example, a Parliament that is willing, as a principle, to give Government their laws after serious scrutiny, should expect to control the rest of its business. That could happen if the House elected its own business Committee that reported to the Floor every week. To remove any residual temptation that Governments might feel to influence the outcome of such an election, there would be a secret ballot. Imagine a parliamentary timetable this week in which we agreed and discussed a budget amendment on the recent bail-out of the banks and we scrutinised the impact of energy companies' policies on the most vulnerable in our constituencies. Imagine if we thought through the concept of "British jobs for British people" and we pondered and were careful and thoughtful about the relationship between the United Kingdom and United States following the advent of a new President. Such a Parliament would be worth listening to, watching and covering—and, for electors, it would be worth influencing. All of a sudden, Parliament would mean something and it would recapture the place that it should have.
	Equally, if parliamentarians elected their own Select Committees, the Committees would get a new legitimacy and lease of life, as well as new and onerous duties in respect of interacting responsibly with the Government of the day. The same could be said of Public Bill Committees. If they were run effectively, they could draw on the immense experience of parliamentarians from all parts of the House, who could create and use their own networks to involve their electors and improve the law. That is why we have Public Bill Committees in the first place. Governments and civil servants should not fear the process, but use it to pick the brains of parliamentary representatives and the public alike.
	I am one of the House's strongest proponents of pre-legislative scrutiny, but the truth is that we would not need to invent pre-legislative scrutiny if legislative scrutiny were as effective as it should be. We have heard a lot tonight about the need for people outside to have confidence in us, but we also need to have confidence in ourselves. We could consider many other reforms openly and transparently, debating them in the Chamber and deciding the way forward. There should be the right of the House to reconvene itself, not the right of the Executive to reconvene the Parliament that should be holding them to account. We could debate each week's most popular early-day motion and make Question Times more topical and conversational. We could use the Chamber's dead hours much more imaginatively. The House could decide again on electronic voting or reconsider this sterile seating plan that defies debate.
	We give the House chances to divide at every opportunity; let us also give it chances to unite at every opportunity. As everyone in the Chamber knows, the truth is that Parliament, as a forum for the nation and for holding the Government to account, is not fit for purpose. The public's view of MPs is at an all-time low and power is sclerotically over-centralised in Whitehall. The moment is approaching when the Government and Parliament must change and reinvent themselves as the leading parts of a revived and modern UK democracy. That chance comes along very rarely, but the House should seize it for the good of our democracy.

Richard Younger-Ross: I recall listening to an interview with David Steel in the 1970s—it might have been on "Desert Island Discs". He said that being a politician should be like going into the Church; it should be one of the highest callings. That was against a background of local government corruption and of a popular belief that MPs were in it only for themselves and that they would say anything to win an election. That view was reflected in a play that I think was called "Vote, vote, vote for Joey Barton"—[Hon. Members: "Nigel Barton!"] Of course, it was Nigel Barton. Some 30 years before that, Howard Spring wrote "Fame is the Spur".
	It has been said that Members of Parliament are held in high esteem in their constituencies, but that Parliament and politicians in general are held in low esteem. Since David Steel's comments, there have been problems and scandals on both sides of the House and at both ends of the building. Cheap comments from the Conservative Front-Bench spokesman do not aid the debate. Sounding like a budgerigar does not take us forward.
	Some of the problems in the House of Lords have been experienced in the House of Commons. We had full-time Members of Parliament and Members of Parliament who were employed in part-time work elsewhere. The latter had a night job and a day job. Members of the House of Lords still have to do that. Their lordships are given a small allowance and most have other employment to supplement it. Some work as lobbyists.

Kelvin Hopkins: I understand that one of our colleagues in the House of Lords accumulates some £60,000 a year by maximising his time in the House and ensuring that he is paid properly. That is roughly what we get.

Richard Younger-Ross: That sum includes accommodation and other matters. We get money for such items in addition to our salary, so the hon. Gentleman does not compare like with like.
	If we are to reform the other end of the building, we should consider making their Lordships full time. If they are to be full time, they need to be salaried. If they are to be salaried, they need to be elected on the same basis as us.
	At our end of the building, it is often said that the media hold us in low esteem. They correctly pick up on corruption and instances when hon. Members have not done right. They pick especially on cases of people who appear to get away with blue murder. A former Member of Parliament—I know who it was but I shall not name him because my point is not party political—was brought before the Standards and Privileges Committee on a charge of being offered shares for influence. That Member was found not guilty because the business that offered him shares had gone bankrupt, so he had not committed an offence. The public do not understand that.
	If the public are to esteem us, we must reform the way in which we pay ourselves and deal with our expenses, but not in a hair-shirt manner, as some hon. Members would have us do sometimes for cheap political purposes. That is not just. We should also refuse to listen to those who say that they want to keep things as they are. Although, by and large, most Members of Parliament do nothing wrong in what they claim, the public do not believe it. As has often been said, justice must not only be done, but be seen to be done.
	We must therefore consider a system whereby what we claim is not only clear and transparent but beyond reproach. The public do not understand Members of Parliament making profits from buying flats. In 1992, several Conservative Members, who were elected in 1987, lost money because of the condition of the housing market at the time. No one in the media said, "Oh dear! These MPs need to be recompensed for their loss." It will also not be understood if Members who were elected in 1997 and 2001 make tens of thousands of pounds on the appreciation of properties that they have bought. We should move to a system that gets away from that. It would be best if we did not pay ourselves allowances for some items. For example, the House of Commons could rent accommodation and allocate it to us in the same way as our offices are allocated. If flats were furnished, we would not need to be paid an allowance to do that. That would be clear, transparent and non-corrupt.

Andrew MacKinlay: I want to concentrate on the "constitutional renewal programme" aspect of the lengthy motion because I am disappointed that, after 12 years of a Government whom I support, there has been little to show in the way of genuine constitutional reform. Indeed, our manifesto in 1997 made it clear that we were intent on reforming the House of Lords and said that we would introduce proposals to do that. It does not matter how much Ministers try to get round that; we have not fulfilled the manifesto commitment. That is only one example.
	Earlier, I said that the Labour Government's hallmark in respect of constitutional reform is deeply conservative. Let me share something that grates on me. I left school at 16, and many contemporaries of mine have turned up on the Labour Front Bench over the past 12 years. They did not go out to work at the same time as me, but went to university, and they peddled some of the most God almighty rubbish in the late 1960s. They were radical and all that, but when they came here, they became deeply conservative. Some of us have political anchorage and we believed from the beginning in tackling the House of Lords and making Parliament more responsive. However, those former radicals have shifted to an establishment position. Even at this late stage, matters can be corrected. It is not sufficient for the Prime Minister to say that he has a programme for constitutional reform. The test is whether he implements it with dispatch. The jury is still out.
	Let me illustrate the conservatism I mentioned. When we came to office, I asked the Government whether they would amend the anomaly in the law that prevented someone who had been ordained as a Roman Catholic priest but had given up the priesthood from standing for Parliament. The Labour Minister responsible said no. Then the Labour party selected a candidate who had been a Roman Catholic priest and wanted to stand for Parliament, and we introduced a law to allow him to stand. We did the right thing for the wrong reasons, and that shows how deeply conservative we are.
	One subject has not been mentioned because the Conservatives are asleep, perhaps the Liberals are, too, and the Labour party does not want to raise it, so I shall do it now. It is the West Lothian question, about which we must not speak. My colleagues present arguments about needing votes from Scotland and so on. I understand those arguments, but I say to Front Benchers that they are in denial. If they do not begin to address the West Lothian question, somebody else will, on different terms. It will not go away. One can argue for a time that there was a settlement for Scotland, Wales and Northern Ireland, but simply to stop there is madness. The question must be tackled—the sooner, the better. The very Union, which we are all committed to maintaining, will be imperilled by not addressing the West Lothian question.

Simon Hughes: The hon. Gentleman has much support, often much less vocal than it should be. There may be differing views from the Liberal Democrat Benches, but we are clear that the issue needs to be addressed within a UK context, and urgently, because our constitutional renewal has stopped short of England, whereas the other countries have seen much progress.

Andrew MacKinlay: Absolutely. If I may return to the historical point, some hon. Members may remember the late John P. Mackintosh, the Member of Parliament for Berwick and East Lothian. I am a disciple of John P. Mackintosh, who produced a programme for the devolution of Britain to make all the parts of the United Kingdom much more coherent, and to allow greater scrutiny at local level where decisions are taken at local level.
	The big states—the big players around the world—are federal. The Bundestag, the Parliaments in Ottawa and in Canberra, and the United States Congress deal with defence, foreign affairs and broad macro-economic social policy, but the rest is left to the states, the provinces or the Länder. Here we try and do too much, and we do it badly. That needs to be addressed with some dispatch.
	We are constrained tonight, for obvious reasons. If Parliament were in charge of our timetable, the subject matter that we are discussing tonight would be debated at much greater length. Clearly, there is a demand among hon. Members to talk more fully about constitutional reform.

Kelvin Hopkins: I agree entirely with what my hon. Friend has been saying. Does he agree that too frequently we have too little time for debates, and that Back Benchers are often squeezed out? In the previous debate, which I tried to get into, I counted the minutes. Front-Bench speakers had 113 minutes and Back Benchers 17 minutes. Seven eighths of the time was taken up by Front-Benchers and I did not manage to get in. That is not right and something should be done about it.

Andrew MacKinlay: I totally agree. Also, what we always get from the Front Benches is the sterile party political line, rather than Back Benchers of all persuasions being allowed to make a contribution to the debate.
	Much of the focus of tonight's debate has been on the reform, or lack of reform, of the House of Lords. I shall make one or two observations. I am for a democratically elected House, but if that cannot be achieved, I think there is nevertheless a consensus for some immediate changes, which should be implemented. We are honoured and privileged to go round the world sometimes to talk to countries about parliamentary democracy. I have asked people, "Have you ever thought about this? We go round and speak in countries where democracy is very fragile and new, but half our Parliament is not elected." Can't we see the perversity of that? We show unbelievable arrogance when we tell other people about parliamentary democracy and half our Parliament is not elected.
	It is absurd that when Prime Ministers need someone in Parliament to be a Minister, that person serves one year but is in Parliament in perpetuity. If Prime Ministers have the power to make people Ministers, those Ministers should be answerable to Parliament, they should appear and be answerable in both Houses, and if they are the architect of legislation, they should pilot it through both Houses, rather than somebody acting as a parrot, which is in nobody's interest. Such Ministers should be temporary. They were put into Parliament only as Ministers, and when they cease to be Ministers, their membership should cease. They should not remain in Parliament in perpetuity.
	I want to say more about perpetuity. This is a very sensitive point. Many people are appointed to the House of Lords and give good service left, right and centre over a long period, but they go on and they go on and they go on. I say this in all seriousness, although people sometimes treat the subject with frivolity. I remember some time ago that I was in my room right at the top, above the House. There was a peer, a very distinguished peer who had given long public service, but he had lost his faculties. He was senile and incontinent. A member of the public tackled me and asked, "Can't you do something about this?" I said, "Madam, I will do what I can, but I have to say to you that he is a legislator."
	This is not unique. It is a highly sensitive subject and is not written about. People do not like touching on it. If peers go on and on and on and if there is no capacity for them to resign their seat, that will happen. It diminishes our Parliament as well as being deeply hurtful to individuals, who do not know how or when to give up. There should be a cut-off point, as happens in the Canadian Senate, and for judges and so on. That should be addressed.
	I am deeply concerned that senior civil servants almost automatically become peers. It is offensive and it is a reward for those who know where the political bodies are buried. Lord Jay, who incidentally is presiding over the appointment of people's peers, was head of the Foreign Office. He is the man who stopped Jeremy Greenstock publishing his memoirs and tried to stop the former United Kingdom ambassador to Washington publishing his memoirs, but he was prepared to take a peerage and what is more, was elevated to decide who is appropriate to be appointed under—I think it is called the House of Lords Commission, but I call it people's peers. That is the kind of cosy thing that goes on. There was a man who presided over a disaster in the national health service. He was immediately dismissed, but he also got to sit in the House of Lords. The bigger the mess up, the greater the rewards in this country, and that has to stop.
	I reminded the Deputy Leader of the House that Robin Cook said, from that Dispatch Box, that he would tackle the question of peers who had gone to prison. If a Member of Parliament had gone to prison in comparable circumstances, they would have lost their seat. He said that he would tackle that issue, and then there was a change of ministerial portfolios and the chance was lost. That is why I return to the charge that the Government are so conservative on these matters. If anyone saw my hon. Friend's body language earlier, they would have seen that he felt awkward. I think that he agrees with me but cannot articulate it from the Dispatch Box. He reminds me of the man who went from Jerusalem to Jericho and fell among sinners—[Hon. Members: "Thieves"] I shall stick to "sinners". The test is whether he can, in his unpaid position, influence the Government and persuade the Prime Minister that we need immediate action.
	We need swift legislation to put a cap on the age of Members of the House of Lords, to allow people there to resign and to allow for the dismissal of those who have been disgraced or have committed crimes that result in imprisonment. That would be a big start, and it would be a signal that the Government are listening to the House of Commons' will. We should introduce legislation to make a fixed House that I hope will be elected, but if it is not, it should be one with a definite membership, and its membership should not be determined by the patronage of the Leader of the Opposition, the leader of the Liberal party or the Prime Minister. Human nature being what it is, they will always appoint people in their own image and likeness. That is the inevitable consequence—we will be swapping the hereditary principle for a house of clones. It is time that Parliament addressed this matter. I believe that that is the will of Parliament, and the test is whether the Government are prepared to listen.

George Young: It is a real pleasure to follow the hon. Member for Thurrock (Andrew Mackinlay), who would top the poll in any secret ballot for Leader of the House. He made a typically defiant, courageous speech, and I agree with what he says about the Government's constitutional programme. The previous Lord Chancellor said that we have not a constitutional renewal Bill, but a constitutional retreat Bill. On Lords reform, I remember being told that the first elections to the upper House would take place at the same time as the 2001 general election. Moreover, the hon. Gentleman is quite right about allowing peers to retire so that their party can refresh their troops in the upper House, allowing younger people to play their part.
	One of the paradoxes of life is that people like their local Member of Parliament, but refuse to believe he or she is typical. Wherever I go, I am told, "We're frightfully lucky here, but the rest of you are up to no good." The reputation of the House would be much higher if people had confidence in their own judgment, based on their experience of their own MP instead of what they read in the press.
	Much has been achieved in this House in recent years, and with the imminent end of dual reporting for MPs, a new guide to the rules—it was published today, coincidentally—a new allowance regime and Select Committee, and greater transparency on receipts, we have the opportunity to build on past strengths and to do even better. As the Committee on Standards in Public Life said about the Commons:
	"We endorse the view that standards in the House of Commons are generally high, and that the overwhelming majority of members seek to, and in practice do, uphold high standards of propriety."
	I see many of my opposite numbers from other countries who come to look at the regime here, and by any international standards, our political system is pretty clean. We deal with the inevitable lapses well, but we must never become complacent.
	One of the consequences of introducing a tougher regime in this House is that it has led to pressure being applied to other parts of the body politic, and it is helpful to put our disciplinary regime in the broader context of that for Members of the European Parliament, Ministers and members of the other place. Anyone can make a complaint about an MP to the independent Parliamentary Commissioner for Standards. If the complaint raises matters of significance, he will produce a report for my Committee, which we will publish unamended, saying whether or not that complaint is upheld, and we can then propose appropriate punishments, some of which are career-ending. None of the other regimes—neither the ministerial code nor the current code for Members of the upper House—has our features of open access, independent scrutiny, publication of findings and harsh reprisal. The code for MEPs has the most generous of all allowance regimes, with the most relaxed audit trail.
	The ministerial code is policed by the Prime Minister, who can decide whether to refer a matter to his independent adviser and whether to publish any report. Neither procedure has ever been invoked. I once complained that a Foreign Secretary had broken the ministerial code. My complaint was passed by the Prime Minister to the then Foreign Secretary, who replied to me, saying that he had not broken the code, showing a circularity of process. In the upper House, the complaints procedure has no independent element and limited sanctions. There would be greater confidence in the two other codes if they adopted those features of ours.
	One of the recommendations that the hon. Member for Somerton and Frome (Mr. Heath) made is to extend the remit of the Parliamentary Commissioner for Standards to cover the upper House. That recognises the regulatory strength of our regime. However, the proposal to extend the remit of the commissioner raises questions about the capacity of his office to take on additional work, while at the same time carrying out with due rigour his inquiries into complaints made against Members of this House. The present commissioner is contracted to work four days a week, although I know that he works more than that. If we are going to extend his remit to the House of Lords, which has more Members than our House, there will be questions to do with resources and whether he will be able to deal with all complaints personally. We therefore need to think that proposal through.
	Some have suggested that by electing the upper House, we reduce the risk of abuse. I am a firm believer in a predominantly elected second Chamber, but I doubt whether changing the mode of entry would of itself drive up standards.
	Let me turn to a case that has given rise to some comment, both inside and outside the House. Last week, my Committee published its report on the hon. Member for Old Bexley and Sidcup (Derek Conway). We required the hon. Member to apologise to the House through the Committee Chairman and to repay nearly £4,000, which in our judgment he had overpaid to his son. Some hon. Members felt that those sanctions did not go far enough and said as much, possibly before having had time to read the report in full. Those who have read the Committee's report will have seen that the breach was less serious than the case on which the Committee had previously reported and that it predated that case, so it can hardly be said to have compounded it. My Committee claims no monopoly of wisdom, but we had a thorough process of inquiry, with a 55-page report and annexes. We considered the case in detail in two meetings and came to a unanimous conclusion.

Derek Conway: Will the right hon. Gentleman accept that I repeat, without qualification, the apology that I have already given him in writing and that I accept, without any reservation, the Committee's conclusion that I breached a rule of the House? I would also like to withdraw the statement that I made to the media last Thursday.

George Young: I am grateful to the hon. Member for his intervention, which means that I can discard the next three pages of my speech.
	There will be an opportunity to debate the revised guide to the rules next Monday. The rules are lengthy and even intimidating, but perhaps I can condense them into two short and easily remembered rules. Rule 1 is: if in doubt, ask. Rule 2 is: if in trouble, tell the truth. If all colleagues observed those two rules, the commissioner and my Committee would be a good deal less busy than they are at the moment, and the reputation of Parliament would stand higher than it does now.

Michael Meacher: There has been an extensive discussion of what is wrong, with which I broadly agree, and in the short time available, I just want to make four proposals for reform.
	The first proposal is that membership of Select Committees, which are the most important channel of accountability, should not be chosen by the Whips, but should be chosen via a secret ballot of Members of the whole House. Indeed, I would go further than that. As many Select Committee reports are extremely good and deserve the attention and decision of the House, there should be a right in a limited number of cases—perhaps four or five a year, subject to prioritisation by the Liaison Committee—for a Select Committee to propose a motion for debate on the Floor of the House, with a vote at the end. That would give the House real influence in laying the foundations for future legislation and reform.
	Secondly, I very much agree with the excellent speech of my hon. Friend the Member for Nottingham, North (Mr. Allen); we should have a business Committee, which would act as co-partner with the Government in determining the agenda of this House. Of course the Government, as the elected party, must have the right to take through their full legislative programme, but there are many other areas of business on which the Government have no direct electoral mandate, and they should be agreed and decided on by this House. I am thinking particularly about choosing subjects for debate in light of the occurrence of major national and international issues. It is, to say the very least, striking that the two most important issues in the past five years have not been the subject of debate with a vote at the end—I refer to the lessons of the Iraq war and the current economic meltdown—despite the fact that the latter is arguably the most traumatic international episode since the last war 65 years ago.
	I come to my third proposal. Just as there are congressional hearings in the United States, there should be confirmation hearings, held by the relevant Select Committee, for all Cabinet appointments nominated by the Prime Minister—and, I would add, for the most important public sector appointments made outside the House. The Prime Minister would, of course, propose the Cabinet appointments, but it would be for Parliament to ratify them—and indeed to recall the appointee if the Select Committee thought it appropriate. There would then be dual accountability—accountability, of course, to the Prime Minister, but also to Parliament.
	The fourth proposal, which I have to say is not mine but that of the Public Administration Committee and its excellent Chairman, my hon. Friend the Member for Cannock Chase (Dr. Wright), is that in cases where the Government, for whatever reason, decline to set up a commission of inquiry, this House should set up its own commission of inquiry, if it sees fit to do so. It could then investigate matters of great public concern. That is not a very radical proposal—it was actually the regular procedure of our forebears in the Victorian Parliament—but it certainly is important.
	There are other proposals that I would like to make, but in deference to the wishes of the House and to your good self, Mr. Deputy Speaker, I will leave it at that. There are major issues for reform, and I very much support the Liberal Democrat party in introducing this debate, which is long overdue.

David Howarth: This debate is really about a crisis of confidence in politics. If we do nothing about that crisis, it could turn into a crisis of confidence about democracy itself. We face a conjunction of crises. The crisis in the political system is happening at the same time as a crisis in the financial and economic system that threatens people's jobs and their confidence in the future. We should take very seriously what the hon. Member for Luton, North (Kelvin Hopkins) said: this is a dangerous situation. Just as with the financial and economic crisis, if we do nothing about the political crisis, or just simply try to get away with the minimum, it could be disastrous. In the case of the political crisis, it could be disastrous for our democracy.
	Some of the things that will have to be done about the economic situation will be unpalatable, and what is done will amount to choosing among options all of which are bad. Similarly, some of the measures that are necessary for dealing with the political crisis will be uncomfortable for many Members of the House. Old certainties will have to be discarded. Politics as normal will not be enough. Many will have to let go of ideas from the past—and jibes from the past; I look particularly at the hon. Member for North-West Cambridgeshire (Mr. Vara) when I say that—if we are to avoid being swallowed by the future.
	The essence of the political crisis is that millions of our fellow citizens do not feel like citizens any more. They no longer feel that they play any role in the government of the state in which they live. They think that the only people who have access to political power are people with very large sums of money—either their own money, or that of large corporations. They feel politically excluded. It is a feeling that one comes across everywhere, including on the picket lines of places such as the Lindsey oil refinery. Decent people should not have to resort to such measures. Whether or not we agree with what they are calling for, they should be heard here. That feeling of exclusion existed well before the recent revelations about what was going on in the House of Lords. What has happened there simply confirms, in the most dramatic way, what people already believe: that power lies with money and that the only part that ordinary people play in politics is as spectators—of either a tragedy or a farce.
	The Government have simply taken on the role of holding the ring between the real players—the lobbyists, the media and big money. That is why the first imperative is to get big money out of politics. There should be a strict cap on how much money one person can donate to a political party. There should be strict limits on what parties can spend at both the national and local level. No one should be able to buy an election or be seen to be buying an election. Legislators who have been bought or who do not care whether they are seen to have been bought should just be thrown out.
	Tackling political exclusion goes beyond dealing with the power of lobbyists. We have to look at ourselves and what we achieve in this place. The very idea of an appointed, non-elected second Chamber—a House of patronage and of networking—is an affront to the mass of people who will never have the connections to get there. That is why we should move now, not later—not in due course—to an elected second Chamber, regardless of what that means for the status and self-regard of Members of this House.
	This place needs radical reform too, not least in the form of election and how we get here—the hon. Member for Luton, North mentioned that. A form of election that means that a tiny number of electors in a tiny number of seats decides the entire general election is part of the problem of political exclusion. The political system ignores the vast majority of voters nearly all the time. We have lost everything that we had in this place that made us a Parliament—a place to which people would look for their voices to be heard.
	The most important aspect is the point raised by at least three Members—the hon. Members for Nottingham, North (Mr. Allen) and for Thurrock (Andrew Mackinlay), and the right hon. Member for Oldham, West and Royton (Mr. Meacher): we do not have the power even to set our own agenda. What we discuss here is what is served up to us every day, under Standing Order No. 14, by the Government. That must go. We must take the power back; we must talk about what the people in the country want us to talk about, and not what the Government want to talk about.

William Cash: Is the hon. Gentleman going to address the question of guillotines and programming? Exactly what he has said about the question whether there is a connection is demonstrated by the fact that we are simply not debating things properly, and therefore Bills that affect people go through without being discussed in this House.

David Howarth: The hon. Gentleman makes a perfectly valid point.
	What we have also lost is our power over money—over Government expenditure. In the opening speech, my hon. Friend the Member for Somerton and Frome (Mr. Heath) mentioned the £37 billion that was passed in 90 minutes in a debate before Christmas. An example of something worse is the £50 billion that the Government have devoted to the second bank bail-out, which went through using a procedure that completely bypasses this House; the Treasury simply authorises the issue of Treasury bills, the Bank of England creates an account and that is it. We have entirely lost the historical power over expenditure.
	We need to become a Parliament again. We are not a legislation machine to be turned on and off at the whim of the Government. We should represent the whole nation—in some sense, we are the nation. If we do not do that, and if we fail again to take these powers back, we will become contemptible—we, ourselves, will become a threat to democracy. One of my predecessors as MP for Cambridge once told this House that it was a
	"pack of mercenary wretches"—
	who would—
	"like Esau sell your country for a mess of pottage."
	He said:
	"Is there a single virtue now remaining amongst you? Is there one vice you do not possess?...Ye are grown intolerably odious to the whole nation."
	We have not got to that state yet, but we must take care that the nation does not come to view us in the same way that Cromwell came to view the Rump Parliament. If we do not change, and change fast, its fate might well await us too, although perhaps in a different way. I appeal to the House to refuse, at this time of all times, to vote yet again for its own enslavement, and to vote instead for the motion that we propose.

Chris Bryant: I say to the hon. Member for Cambridge (David Howarth) that hyperbole hardly ever helps in these debates. The debate has been well attended by Members of all parties, and throughout it we have heard shared concern about the issues that face Parliament. There is real determination in all parts of the House to put right things that need to be mended and ensure that we have a Parliament that is respected by the whole nation.
	I have already spoken at considerable length, but I wish to respond to some specific points that have been made. The Chairman of the Standards and Privileges Committee referred to the Committee's report on dual reporting, which has been published today. The whole House will be grateful to the Committee for the work that it always does in trying to ensure that our reputation is maintained. We will have an opportunity next week to examine the specific recommendations of the hon. Gentleman's Committee.

Jack Straw: Right honourable.

Chris Bryant: The Lord Chancellor reminds me of the right honourable nature of the right hon. Member for North-West Hampshire (Sir George Young).
	If the House is able to end the business of having to report separately to the Registrar of Members' Interests and the Electoral Commission, the Government stand ready to commence section 59 of the Electoral Administration Act 2006 so that we, as parliamentarians, have to report to only one place.
	Several hon. Members referred to the matter of whether we should elect all members of Select Committees and whether we should elect the Chairmen of Select Committees by secret ballot. Although that sometimes seems an attractive option, there is a danger that if the majority vote were always to carry the decision on the membership and Chairman of every Committee, we would not have the independent Committees that we need. The minor parties would suffer most.
	I say to those who call for a business Committee of the House that they fail to understand the major and significant difference between this House, in which the Government are constituted solely by virtue of their majority, and other Parliaments that operate differently, in which Ministers are often precluded from being members of the legislature. To those who believe that a nirvana might come if we were to have a business Committee, I say that other Parliaments that have such committees have precisely the same complaints about whether there is the right allocation of time and whether individual Back Benchers have their interests met and can make speeches.
	Some hon. Members suggested that this Government have not been radical enough on constitutional reform. All that I would say is that when the Liberals were in power, they never managed to reform the House of Lords in any way at all. The Conservatives never had any desire to do so, and it is only this Government who have managed to remove the majority of the hereditary peers. It is only by virtue of our work that the Law Lords have been reformed. We are proud to be a Government who have brought forward devolution and freedom of information.
	My hon. Friend the Member for Thurrock (Andrew Mackinlay) demanded that I agree with every single thing that he said, but I am afraid that I am unable to do that. He said that I have fallen among thieves by virtue of my membership of the Government. Well, there is honour among thieves, and the truth is that this Government are committed to the reform of Parliament. Nobody should have a job for life, we should have a smaller Chamber and we have laid out a clear path to reform.
	I am glad to have my right hon. Friends the Leader of the House and the Lord Chancellor by my side as I point out to hon. Members who have said that we are not being diligent enough in bringing forward constitutional reform that we committed ourselves in the Queen's Speech to introducing a constitutional renewal Bill later this year. I believe that the whole House is united in wanting to protect its reputation and in its determination to do everything necessary to ensure that that happens.

Question put (Standing Order No. 31 (2)), That the original words stand part of the Question.
	 The House divided: Ayes 47, Noes 221.

Question accordingly negatived.
	 Question put forthwith (Standing Order No. 31 (2)), That the proposed words be there added.
	 Question agreed to.
	 The Deputy Speaker declared the main Question, as amended, to be agreed to (Standing Order No. 31(2).
	 Resolved,
	That this House believes that all Members of both Houses of Parliament should uphold the highest standards in public life, should be UK residents for tax purposes and should face the toughest sanctions if they undermine Parliament's reputation; notes that the Government has taken significant steps to strengthen probity in the political system, including the revised Ministerial Code in July 2007 and the appointment of an independent adviser on Ministerial interests and the creation of the independent Electoral Commission; notes the inquiries established by the Leader of the House of Lords; further notes that this House has a clear code of conduct governing hon. Members and has adopted tough new rules on Members' allowances, a new requirement to declare and register any family members employed by hon. Members, a robust new audit system which will see the independent National Audit Office carrying out a full-scope audit of Members' expenditure and a transparent system of publication of details of their expenses; supports the Prime Minister's commitment to further constitutional reform as outlined in the Governance of Britain, including the dissolution and recall of Parliament and the power to declare war and to ratify treaties; notes the pre-legislative scrutiny of the draft Constitutional Renewal Bill by the Joint Committee; notes that the Political Parties and Elections Bill proposes to restrict political spending, bring greater transparency to political funding and strengthen the Electoral Commission as an effective regulator; and hopes that all parties engage constructively in developing a consensual approach to political party finance.'.

Business without Debate

DELEGATED LEGISLATION

Social Security

Ordered,
	That the Employment and Support Allowance (Up-rating Modification) (Transitional) Regulations 2008 (S.I., 2008, No. 3270), dated 18 December 2008, be referred to a Delegated Legislation Committee.— (Chris Mole.)

PETITION
	 — 
	Traffic Management (Essex)

Bob Spink: I will be brief so that the House can rise and staff can get home in the snow.
	The borough and county councillors have known of, but ignored, the poor junction design at Climmen road, resulting in numerous accidents and, we now hear, injuries. Borough Councillor Alan Partridge says he was aware of visibility problems, but that is simply not good enough. I demand action from those councillors and I congratulate Samantha Mitchell and her superb fellow residents on producing this petition. It states:
	The Petition of Samantha Mitchell and local residents,
	Declares that residents are deeply concerned about the safety of the road design at the junction of Climmen Road and Central Wall Road and have noted many accidents at this roundabout junction including injury accidents involving children, and therefore call on the Borough and County councillors to listen to residents and improve the road design in consultation with residents.
	The Petitioners therefore request that the House of Commons urges the Government to review its guidance to local councils on the design of road junctions where mini roundabouts are used and to ask the local authority to investigate this particular junction and to implement a new and safer scheme after full and detailed consultation with residents.
	And the Petitioners remain, etc.
	[P000312]

EASTHAM

Motion made, and Question proposed, That this House do now adjourn.— (Chris Mole.)

Ben Chapman: I am delighted to have secured this debate about Eastham, as I feel strongly that it has been dealt a series of unfair blows recently, and I am pleased to have so many colleagues around to support me. Every community needs to retain certain basic facilities, which need to be preserved and protected from planning and other decisions that threaten to damage them. Any community needs an essential core. Eastham is characterised by being a pleasant and normal English community. It is not an inner city area. It is not rural. It does not depend on any one industry. In many respects, it is a microcosm of our society. My central motivation in leading this debate tonight is to challenge decisions that have been taken and to try to ensure that Eastham and other communities like it do not continue to be the victims of chance.

Peter Kilfoyle: Like my hon. Friend, I am a great fan of Eastham. As a boy, I used to cycle down by the locks there. Will he tells us a little about the general environment, because I do not think that people understand what a picturesque place Eastham is?

Ben Chapman: I am grateful to my hon. Friend; that is absolutely true, and I shall deal with that point in those specific terms in just a moment.
	Local authorities should have a vision for the protection and preservation of and comprehensive development strategies for communities such as Eastham. Decisions that do not act to Eastham's advantage should be taken within a framework of detailed local knowledge and in accordance with the needs of local people, rather than by dint of the vagaries of chance, ad hoc actions and the whims of others, without heeding the consequences.
	As my hon. Friend suggested, it might be useful to provide an overview of Eastham's place in Wirral and its history. It has a population of about 12,000. Much of it is a green belt area, stretching from the border of the Bromborough industrial estate to the historic Manchester ship canal, the entrance to which is in Eastham at Queen Elizabeth dock. The original village of Eastham, around which more modern housing has been developed, is one of the oldest villages on the Wirral peninsula. It has been inhabited since Anglo-Saxon times and was mentioned in the Domesday Book. St. Mary's church, which is at the heart of the village, is still active today, of course. The closure of its primary school some while ago, however, did not augur well for the sort of development of which I will speak.
	A report in the parish magazine for September 1874 quotes Nathaniel Hawthorne—who was then the American Consul in Liverpool, as my hon. Friends will know—as describing Eastham as
	"the finest old English village I have ever seen, with rural aspect, utterly unlike anything in America, in its midst a venerable church with a most venerable air."
	Much of the old village remains, with a mediaeval street pattern, irregularly clustered period buildings and a distinctive character.
	Eastham village conservation area was designated in April 1974, and Wirral metropolitan borough council has specific policy objectives for it: to maintain the sense of separation from the surrounding built-up area through the retention of open spaces around the village core; to preserve the setting and sense of enclosure afforded by boundary walls, hedges and mature landscaping; and to preserve the visual setting of the village cross, war memorial and the church of St. Mary, with its yard and lichgate. Although I welcome that limited protection for the historic village, what is needed is a comprehensive policy framework for development in the whole area.
	Eastham, like many other communities, has a small number of the key facilities that make it up. There is a much-valued day centre, which provides vital facilities for adults with learning and physical disabilities, and the excellent Lyndale school, which specialises in the education of children with profound and multiple learning difficulties. It is a centre of excellence. Last October, with my right hon. Friend the Secretary of State for Children, Schools and Families, I saw the admirable work carried out by its talented and committed teaches.
	Other local amenities include the usual selection of cafés and shops. A new medical centre is being developed, and there are facilities such as a rugby club, an Air Training Corps site and allotments. One of Eastham's most treasured aspects is its country park, which is central to its character and a popular attraction. Home to a huge range of wildlife, it is a local treasure. It is also an important educational resource. Every year, park rangers lead more than 3,000 schoolchildren on activities, thus nurturing an interest in and understanding of nature and their environment that will stay with them into their adult life. Despite the loss of the Church primary school, good mainstream schooling is provided at Heygarth, Millfields, Mendell and Raeburn primary schools. South Wirral high school provides excellent secondary education.
	But there are problems. Eastham gets little by way of funding. It suffers, like other areas that are neither rural nor inner city, from a lack of funding streams. My constituency as a whole and Eastham in particular is heterogeneous, rather than uniform in character. Notwithstanding the Government's investment in communities that has surpassed that of any other Government, areas that may be classified as suburban—although Eastham would not see itself in that light—are in danger of falling between two stools and thus missing out on the resources that they need. Urban and rural areas benefit from policies, lobbies and organisations adept at getting the most out of the bidding system. Areas such as Eastham suffer as a result and do not benefit greatly from, for example, neighbourhood renewal, Sure Start or other such improvement funds. It is also a long way, and is seen as such, from the town hall in Wallasey.
	Like many parts of the country, Eastham has social behaviour problems, often associated with excessive drinking by the young. The youth service and the police tackle the problem, but several shops in Clifton avenue, for example, have long been unoccupied, and have attracted antisocial behaviour and vandalism. Over the years I have corresponded about the matter with Wirral Partnership Homes, the council and the police, and I have recently been assured that they are working together to improve the situation. I hope that they are.
	A new Tesco is to be opened on the Eastham Rake. In some ways that is welcome, but residents are worried about the threat to local small shops. Many of Eastham's most valuable assets need better funding, or face an uncertain future. Unfortunately, even the prized country park is not immune: it faces the loss of a park ranger as a result of cuts owing to Wirral's economic situation.
	The day centre is experiencing a number of problems. The local authority is requesting that its privately funded minibuses be used for transport at other smaller centres elsewhere in Wirral. I recently met representatives of the local parents association who believe, I think reasonably, that the centre is the benchmark for adult day services in the area, and that full use of their own minibuses is essential to enable it to provide the best possible service.
	To add insult to injury, the local authority has stopped funding fuel for the minibuses. The parents association tells me that funding for the fuel is now being provided by them and by carers at the centre. That penny-pinching is ill-advised. Worse still, the centre may be under threat of closure following the council's strategic asset review.

Stephen Hesford: It is a pleasure to be able to intervene on my hon. Friend, who does a remarkable job on behalf of his constituency and is a good neighbour of mine. He mentioned the strategic asset review. Does he agree that the review has problems, not least because it singled out Eastham library for closure when it was not on the list and swapped it with another library on the night of the decision? The same happened to Woodchurch library in very similar circumstances.

Mr. Deputy Speaker: Order. The hon. Gentleman is, very ingeniously, trying to involve his own constituency in the debate, but the debate is very tightly drawn. The hon. Gentleman has probably said enough to enable his hon. Friend to respond to the point that he is making.

Ben Chapman: I am, of course, focusing on Eastham, but I am focusing on it as an exemplar of other communities. The council's action in not including certain libraries in the review and consultation process and then closing them is wrong in both form and substance. I shall discuss that in some detail shortly.
	Lyndale school is invaluable, but it is a primary school, and at the age of 11 its pupils must move to a different school that will not offer the same degree of specialisation. Teachers and governors believe that that is disruptive to children's development, and that Lyndale should teach children up to the school leaving age. Such an extension of what is a highly valuable institution would be very welcome.
	In 2008, it was announced that Heygarth and Millfields primary schools were to lose their crossing patrols. After writing to Wirral's chief executive, I was informed that the council was reconsidering its position. Although I have emphasised to the chief executive the importance of ensuring road safety outside those schools in particular, I am not going to hold my breath.
	Many Eastham residents find employment at Vauxhall. This is an issue close to the heart of my hon. Friend the Member for Ellesmere Port and Neston (Andrew Miller). Like the rest of the motor industry, Vauxhall faces challenges, which may mean challenges to my constituents' employment. We hope that the new Astra—which, I believe, will be produced in September—will alleviate the problem, but nothing is certain in the current climate. My constituents are uncertain, for instance, about the plans of Peel Holdings for land around Queen Elizabeth dock and for a tidal power scheme.
	The future of Carlett Park, a further education campus in Eastham, is of profound concern. For many years I have campaigned to protect the campus from closure. In response to a question from me, the Minister called on the college to look again at the hole in the community that would be left by the removal of the campus.
	Carlett Park may be a casualty of the current and historic trend towards shifting the focus of the majority of Wirral's facilities to the north of the peninsula, leaving my constituents in the south—and to some extent in the west—devoid of key amenities. The centre of gravity in terms of population and politics in the north results in many in the south feeling hard done by and deprived.

George Howarth: My hon. Friend is known on Merseyside as a doughty champion of his constituency. As someone who used to teach at Carlett Park—and without interfering in the internal politics of further education in the area—I know that it had a very good reputation when I was there, although I suspect that I did not contribute greatly to that. It still has a good reputation and it would indeed be regrettable if it could not continue as a centre of further education.

Ben Chapman: My right hon. Friend makes the point much better than I was doing that the college is at the heart of the community. It cannot be judged solely in day to day terms because it is part of the history of the area and of Eastham in particular. People who have been educated very well there over the years, thanks to my right hon. Friend and others, greatly value its presence. It is emblematic of Eastham.
	The closure of Carlett Park was not always inevitable, but sadly the college has almost made it so. Steps could have been taken to ensure that it adapted to remain relevant and to survive. It should have focused on engaging with local businesses, working together to ensure that local people could be educated locally in a way that provided them with the skills they need for our modern economy. The proximity of Carlett Park to the large and progressive companies in the Wirral international business park offered obvious opportunities for that kind of co-operation. Sadly, that has not been done and if the campus closes it will contribute to removing the heart of the community. I have told the college repeatedly that its facilities are about community as well as education, but it falls on deaf ears.
	In recent times, Eastham has been threatened by two planning proposals, which have caused considerable anger and concern in the community. There have been obvious objections to the presence of heavy industry so close to a residential area—a mediaeval residential area at that—and one has to ask how such an area was ever zoned for industrial use. Agri Energy made an application for a grant to invest in a gasification plant which has now been put on hold following widespread local opposition. Proposals remain, however, for a Biossence plant that would convert waste into energy. Recent ministerial assurances about air quality will not go far enough to satisfy the range of concerns felt by my constituents on this issue. These include noise pollution as well as air pollution, disturbance to the local environment and safety. I have made a range of representations on this subject to the chief executive of Wirral council and the chief executives of the companies. I have asked parliamentary questions and met Ministers, and I have also offered local campaigning organisations meetings and the possibility of presenting a petition to Parliament.
	In response to these threats, my constituents in Eastham have been organised and vocal in defence of their neighbourhood. The Eastham Village Preservation Association, founded in 1969, has fought hard on several issues, including those I have mentioned. More recently, residents have also formed Eastham Fights Back, which continues to voice their opposition forcefully.
	The most recent blow to be dealt to the people of Eastham is the closure of its library and one-stop shop housed in the same building, which I had the pleasure of opening in August 2005. I welcome the retention of such facilities in Bromborough, but they will be much less accessible for Eastham residents. The closure of the library is deeply concerning to me on two levels. The first is that the council may have acted without due process, failing entirely to consult the public. At best that could be unconstitutional, but at worst it could be maladministration. It is certainly unprincipled and demonstrative of a lack of vision.
	Eastham library is to be closed as part of Wirral council's strategic asset review, involving 11 libraries and more than 20 other facilities. This library—as was the case with Woodchurch, I think—was not earmarked for closure but was added later, after the consultation process. There is at present no statutory requirement for consultation by local authorities before closing libraries and they are not obliged to tell the Department for Culture, Media and Sport that they are doing so. I am testing out what sanction the community has against that.
	Although I understand the local authority's need to balance the budget and to avoid high increases in council tax, especially at a time when families across the country are finding it difficult to make ends meet, Wirral council has none the less received above inflation increases in support from central Government every year since 1997. It is also worth noting that the library has received investment of more than £300,000 over three years. Its closure thus does not seem to make economic, or any other, sense. As a result, I have tabled questions to the DCMS and the Department for Communities and Local Government in order to establish whether provisions are in place to discourage such closures and how those closures fit into the broad framework of Government policy on libraries.

Ian McCartney: We had a similar situation in our area. With the local council and the Government, we made a range of alternative arrangements. The library has been relocated and the old libraries became community centres, linked to the new library. That has increased the number of people involved in the library. Would my hon. Friend like to come to Wigan with some of his residents to have a look at what we have done? He could then approach the Government to reach an alternative solution to save his libraries and his communities.

Ben Chapman: That is an extraordinarily helpful suggestion. A number of assets have been proposed for community transfer, but no preparation has been made for that and no guidance has been given. No packs have been handed out and no explanation has been given of how to set up a trust or whatever is needed to run such facilities. No opinion has been offered on what happens when one has managed to raise the revenue to run the facility but is suddenly faced with a high capital cost. What on earth is a community group running a local facility to do if the roof goes? That is the sort of lesson that I could learn, with others, from visiting my right hon. Friend's constituency.
	Although it is not legally binding, the DCMS expects there to be a well-publicised consultation with the local community over a minimum of six to eight weeks. That most certainly did not take place in the case of Eastham. The second cause for concern is that Eastham library is a valuable asset. The flood of correspondence that I have received from alarmed constituents, angry and shocked at the decision, is evidence that it is used and valued by young and old alike. The loss to the community is obvious. Wirral council's website lists the library as one of few key amenities on the Mill Park estate, which is the largest council estate in the ward. The many groups who benefited from that local community library will be worst affected by the closure.
	Communities such as Eastham are local, and the facilities that make up their heart need to be local, too. Eastham deserves not to be merely subject to the function of chance and all manner of random decisions, regardless of their adverse effect. Instead, its local authority and others should adopt a strategic view. The catalogue of recent events that I have outlined, on top of the loss of a post office some while ago, demonstrates that that is all sadly lacking and my constituents are suffering as a result.
	Eastham is diverse both in terms of architecture and landscape and, crucially, in terms of the needs of its population. A comprehensive strategy must be put in place that takes into account that diversity and the proud heritage of the community. Such a strategy should, among other things, take account of the current and historic bias towards the north of the peninsula.
	I call on Wirral council to review its decisions on the closure of 11 libraries, including tragically that of Higher Bebington, and the loss of more than 20 other facilities, taking due account of the effect on communities. I ask the DCMS to consider the effect of closing those 11 libraries at a stroke. I ask the council and the Department, together with the DCLG, to look at the processes involved in the closure of Eastham—and, indeed, Woodchurch—which seem to be on the borders of immorality and illegality.

Stephen Hesford: My hon. Friend is making a powerful case. May I add to his list Hoylake and Irby libraries?

Ben Chapman: rose—

Mr. Deputy Speaker: Order. Before the hon. Member for Wirral, South (Ben Chapman) responds, may I say that I do not wish to curtail his Adjournment debate, which is obviously very important to him? I would ask him, however, to bear in mind that the House seriously truncated its debates earlier so that the staff of the House could get home.

Ben Chapman: I will not respond to the intervention, Mr. Deputy Speaker.
	I ask Wirral Metropolitan college to look again at the closure of Carlett Park, and to heed my repeated pleas about its effect on the community. I ask Wirral council to have an overall strategy for its borough and individual communities, and to be conscious of the cumulative and consequential effects of individual decisions. As it is, the very bodies that ought to be promoting Eastham are those that are damaging it. The subject of this debate is the preservation, protection and development of Eastham; I do not believe that we are doing any of those effectively.

Iain Wright: I congratulate my hon. Friend the Member for Wirral, South (Ben Chapman) on securing the debate. He is renowned in the House as a tireless advocate on behalf of his constituents. I recall a debate that he and I had a couple of months ago on the important matter of allotments, in which he advanced the case on behalf of his constituents with considerable skill. He has done the same tonight.
	My hon. Friend will know that, unfortunately, I am unable to give him the detailed answers that he is seeking to each of the points that he has raised. That is because the issue to which he refers ultimately needs to be decided and resolved locally. That does not mean, however, that I want to dismiss his overall argument. Quite the contrary: I completely agree with it. Tonight, he made a compelling case for preserving the local strengths and resources in Eastham, which are important sources of pride for the local community. I absolutely agree with his central argument that local authorities must have a strategic vision for the future, that local people should be central to shaping and influencing that vision, and that all decisions must be taken with reference to that overarching strategic plan. In that context, let me address the points that he has raised.
	I want to start by making it clear that I absolutely agree that no community should be, to use my hon. Friend's vivid term, the "victim of chance" in the manner that he describes. It is essential that the planning system should produce fair and transparent outcomes, and that communities have every opportunity to make their voices heard, to have their say and—I cannot stress this enough—to be able to influence decisions under consideration by the local authority. If that ability is not available, the public's faith in consultation and—a more fundamental point—faith in the political process will be undermined.
	My hon. Friend stated that Wirral borough council recently undertook a strategic asset review to look at making the best use of its resources. I understand that the objective of the review is to improve service delivery, offer better value for money, and support the regeneration of the whole borough. I am sure that he will agree that it is right for local authorities to consider whether the services that they offer to people are up to date, responsive to local needs and priorities, and provide value for money for the local taxpayer. However, I have enormous sympathy with the arguments that he has advanced in the House tonight and on his website, where he states:
	"Whilst these decisions are a matter for the Council and Councillors, and not the MP, I am obviously concerned for my constituents, the staff involved and about the loss and quality of services. Overall, I very much regret that we have found ourselves in this position and that decisions have been taken so quickly. The decisions seem even harder to justify given that Wirral has had above inflation increases in support from central government each year since 1997."
	He reiterated that point tonight.
	I understand that, as part of the strategic asset review, Wirral is looking at the condition of public buildings, their accessibility and the facilities that they offer. The local authority also undertook a six-week consultation, inviting residents and private and public organisations to contribute. The conclusion reached from this exercise was that "fewer is better". It is not for me to comment on that conclusion. I understand, however, that the local authority wishes to join up council services with those of other organisations such as the police, the fire service and local primary health facilities. This seems sensible, as it would provide co-ordinated public services for the people of Eastham.

Andrew Miller: My hon. Friend the Member for Wirral, South (Ben Chapman) mentioned Peel's plans, which include a massive housing development just over the border, in my constituency; it was approved as one of the Government's growth points. Does the Minister not think that, as part of their strategic thinking, local authorities should engage with their colleagues across borders to ensure that where facilities are changed and housing is developed, there are adequate support facilities, such as libraries, to meet the needs of the local people?

Iain Wright: That is a fair point. Obviously, I cannot comment on specific proposals that may go before the Secretary of State as part of the planning process. However, the idea that a local authority stands alone and autonomously is not appropriate in the modern world. A local authority will have links with neighbouring authorities. Given such things as multi-area agreements, it is important that local authorities talk to one another.
	On the point made by my hon. Friend the Member for Wirral, South, the contentious element is that Wirral borough council wants to focus resources on Bromborough, which means that Eastham library is earmarked for closure. I want to concentrate on that aspect, because the issue is very important.

Ben Chapman: I very much welcome the retention of Bromborough, but if Wirral council wanted to do that, why did it not say so?

Iain Wright: I shall come on to that.
	Let me talk in general terms about libraries, which play a vital role in our communities and provide crucial services. When I was studying for my A-levels—not too long ago—I remember using Hartlepool's libraries. They helped me get to university. Nowadays, the best libraries are state-of-the-art resource centres for an area, a welcome magnet for the entire community, with internet cafes, coffee shops, places of advice on jobs, skills and housing, and community rooms to allow residents' groups to meet and community cohesion to grow. They are real assets, and it is not surprising that local residents feel so passionate about them. Indeed, during the annual, painful budget-setting round when I was a councillor on Hartlepool borough council's cabinet, I felt so strongly about the value of local libraries that I always said that I would resign if any had been proposed for closure.
	With regard to the concerns of my hon. Friend and of the residents of Eastham, I understand that the local authority has now, largely thanks to his efforts, agreed to work with the local community to explore alternative ways of making the best use of all facilities, including, as he said—I appreciate that he has some concerns about it—asset transfer to the community.
	I reiterate my central argument that decisions about funding priorities and the best way in which to meet the needs of local residents must ultimately be made by local authorities. Central Government and Ministers cannot interfere in that. However, my hon. Friend made an important point about the consultation process. It is vital that that is clear, transparent and well publicised. I know that a consultation process took place between 27 November and 15 January, including four special area forum conferences, which were attended by more than 2,000 people. I also understand that the consultation was publicised in the local press and on the council's website.
	I note from my hon. Friend's website and from his comments tonight that the decision about Eastham library was made as a result of the consultation and was not therefore directly consulted on. That is important. My hon. Friend the Member for Wirral, West (Stephen Hesford) also mentioned it. I also note that my hon. Friend the Member for Wirral, South was concerned that, as an important local stakeholder, he was not consulted. That is not good enough and I hope that his efforts tonight demonstrate the strength of his feeling to local decision makers. I understand that three overview and scrutiny committees met to consider recommendations presented to cabinet on 15 January. The views of those committees will be made to full council on 9 February.
	There are no easy answers in such circumstances. It is not for me to interfere in such local decisions, but I emphasise that it is essential to follow the proper procedures and that local residents have every opportunity to be involved in shaping the future direction of their community.
	Such decisions are undoubtedly difficult locally. It is important to strike a balance that meets the needs of as many local people as possible, providing them with the widest possible services. Given my hon. Friend's excellent contribution tonight, I hope that he will continue to work with all local partners to help achieve the goal of excellent public services for the widest possible community.
	 Question put and agreed to.
	 House adjourned.